PRIVATE BUSINESS

London Local Authorities (Shopping Bags) Bill  (By Order)

Order for Second Reading read.
	 To be read a second time on Thursday 6 November.

ORAL ANSWERS TO QUESTIONS

TREASURY

The Chancellor of the Exchequer was asked—

Small Businesses

Don Touhig: What assessment he has made of the effects of recapitalisation on the policies pursued by the recapitalised banks on providing credit to small businesses.

Alistair Darling: The measures that I announced on 8 and 13 October included agreements with the banks that use the bank reconstruction fund that they would maintain the availability and active marketing of competitively priced lending to small businesses at 2007 levels.

Don Touhig: As a former chairman of a county council finance committee, I once borrowed £37 million from the European Investment Bank; I also managed to pay it back. I welcome today's announcement that the bank is to make £4 billion-worth of credit available for small companies in this country. Many of them are faced with bully-boy tactics from British banks, which are simply cancelling their overdraft facilities and denying them vital capital to invest. What action can the Government take to ensure that British banks give small businesses the same support that our Government have given the banks?

Alistair Darling: I agree with my right hon. Friend that it is important that we do everything we can to support small and medium-sized businesses in this country. They employ more than half the work force and account for an important part of the economy. In addition to the EIB making £4 billion available to British banks, we want to ensure that the banks that have used the bank reconstruction fund make funds available at the equivalent of 2007 levels, and that they make that EIB money available. That does not mean that everyone who comes through the front door of a bank will get what they want, on the terms that they want, but it is important that British banks play their part. We, on behalf of the taxpayer, have put a lot of money into the banking system because we recognise its importance. In turn, banks have to recognise the importance, not just to the country but to the banks, of ensuring that small and medium-sized enterprises get the support that they need.

Michael Fallon: Will the Chancellor clear up the position that the newly appointed Government directors of the banks in question will take when considering such lending? Will they be required to act in the interests of the Government, the taxpayer, or—as proper company directors do—the business?

Alistair Darling: I made it clear when I made my announcement in the middle of last month that even the banks in which we are taking significant shareholdings need to operate in a commercial manner. They will operate at arm's length from the Government. All directors have one duty, and that is to represent the interests of their shareholders; of course, the Government, on behalf of the taxpayer, will be a major shareholder in three of the banks. No doubt we will explore the issue further when I appear before the Treasury Committee, of which the hon. Gentleman is a member, on Monday afternoon.

John McFall: The Chancellor, along with the Governor of the Bank of England and the chairman of the Financial Services Authority, has kindly agreed to come along to the Treasury Committee's banking crisis inquiry on Monday. We asked the public what questions they would like to ask the Chancellor, the Governor and the chairman of the FSA, and more than 1,500 e-mails have been received. One big issue is that the banks do not play fair with savers and small businesses. The taxpayer is the lender of last resort, but today will the Chancellor and Lord Mandelson impress on the banks that the taxpayer will certainly not be the sucker of last resort?

Alistair Darling: My right hon. Friend has done a good job of providing a trailer for Monday afternoon's performance. He rightly draws attention to the fact that today, many businesses find things difficult because of the prevailing economic conditions. We need to make sure that banks do not make a difficult situation worse. As I say, that does not mean that every business will get what it wants, on the terms that it wants—because although something might have been a good business prospect 12 months ago, the situation may be different today. It means that banks have got to play their part. Small businesses rely on banks for support more than large businesses do. The banks need to remember that although they go looking for customers in the good times, when times get more difficult their customers depend on them, so it is important that they play their part. My right hon. Friend Lord Mandelson, the Secretary of State for Business, Enterprise and Regulatory Reform, will meet small business representatives and banks regularly to ensure that if problems arise, we work through them, because it is important that we make sure that support gets through to where it is needed.

Richard Spring: Is the Chancellor aware that some banks are changing small businesses' overdraft facilities to loan facilities, with an even higher rate of interest, at a time of difficult commercial problems for small businesses? When the Chancellor and the noble Lord Mandelson hold the meetings just mentioned, will the Chancellor bring to the attention of the bankers just how devastating the changes are to businesses' cash flow and chances of survival?

Alistair Darling: Yes, and Lord Mandelson and I raised those cases when we met the chief executives of the major banks a week ago today. We will continue to raise those matters. If hon. Members come across such cases, they will obviously make inquiries about what exactly happened. If there appears to be no justification for what has happened to a business and put it in difficulties, my colleagues and I will be very pleased to hear about it from hon. Members, the hon. Gentleman included.

Lyn Brown: I congratulate the Chancellor on the recapitalisation of banks, which has been admired and copied throughout the world, but was that task helped by the leaking of confidential documents by the Bank of England and by the hon. Gentleman on the Opposition Front Bench on "The Andrew Marr Show"? What does the Chancellor think of his opposite number's judgment? [Interruption.]

Mr. Speaker: Order. Did the hon. Lady warn the shadow Chancellor that she was going to make an attack on him?

Lyn Brown: No, Mr. Speaker.

Mr. Speaker: Well she should have done. I call Julian Brazier.  [Interruption.] Order. The hon. Lady must behave herself.

Julian Brazier: The Chancellor has made a series of assertions to comfort small businesses, but may I now direct him back to the question from my hon. Friend the Member for Sevenoaks (Mr. Fallon)? The Chancellor knows perfectly that the duties of directors are laid down extremely clearly in law and are tightly and narrowly drawn. Does he plan to introduce an order to vary the legislation on that, or not?

Alistair Darling: No, Mr. Speaker.

David Kidney: I can understand why the Chancellor would not want the request to the banks to lend at 2007 levels to be taken as a green light to repeat the mistakes of the past in terms of irresponsible lending, but does he agree that any analysis will show that there has been very little evidence of irresponsible lending by banks to small businesses? Therefore, will the Chancellor ensure that the banks maintain their focus on keeping credit lines open to small businesses?

Alistair Darling: Indeed, that is what I was saying just a few moments ago. The point that I was making was that there will be occasions when a business with a credit line or other facilities with a bank may have a perfectly good business, but for perfectly understandable reasons circumstances may have changed and the bank may then say, "Look, we'll have to change the arrangements." I think that everyone understands that. What people do not understand is if a bank, especially one that has had the benefit of a substantial injection of public funds, has a blanket policy of saying to people, "Actually, we're not concerned about you at all, and we'll cut your credit and put you into difficulties." In any banking operation, whether it is lending to individuals or to businesses, there must be discretion, and Opposition Members made the point that directors clearly have a duty to the banks' shareholders. But at present, learning from what has gone wrong in the past, if we do not ensure adequate funds are available to small and medium-sized enterprises, we will exacerbate the situation. That is why, both in terms of capitalisation of the banks and the measures that we announced earlier this month, and today's announcement in relation to persuading the EIB to come forward with substantial sums, I hope that banks will play their part, because it is as much in their interests as it is in everybody else's that this works.

George Osborne: I look forward to the advance warnings of the attacks on me, which certainly would have helped in the last week.
	The banks, of course, should act responsibly to help small businesses as the economy deteriorates, but does the Chancellor agree that the Government should act responsibly as well? Can he confirm that he is still— [Interruption.]

Mr. Speaker: Order. We must allow the hon. Gentleman to be heard.

George Osborne: Thank you, Mr. Speaker.
	Does the Chancellor still plan to increase the small companies tax rate next April? Does he agree that even if this was a good idea two years ago—and I did not agree that it was—it is certainly not a good idea when we are in recession? Will he now abandon this tax rise? If he does not do it now, he will certainly have to before the Budget in April.

Alistair Darling: I agree that the Government have to play their part in supporting businesses and in supporting individuals. For example, the fact that we have reduced the amount of tax paid by basic rate taxpayers is an extremely useful step. We have frozen fuel duty, and if I may say so—if the hon. Gentleman does not take this as an attack—that is a much better policy than the fuel duty escalator that he announced in July, which would have resulted in fuel duty having to go up now, at the very time when businesses want tax to come down. We will continue to do everything that we can to help businesses, because that is very important.

George Osborne: The Chancellor of the Exchequer is planning to increase the small companies tax rate next April. If he wants to talk about cars, I should say that he is still planning the big increase in family car tax next April as well. Surely the thing that would most help small businesses—this is a simple statement of fact—is a sustained reduction in interest rates.
	The Chancellor and I agree that the Monetary Policy Committee must make its own decisions, but the Government should do nothing that gets in the way of that. Will we have an end to all this irresponsible spinning about Keynesian spending splurges and all this irresponsible nonsense about borrowing without limit, which have spooked the international markets? Can we instead have from the Chancellor a clear plan to get the public finances back under control? Is it not the case that on the current path, this Labour Government are set to leave behind them the biggest budget deficit of any Labour Government in the entire history of this country? Again, the Conservatives will have to clear up the mess.

Alistair Darling: If I were the hon. Gentleman, I would say a little bit less about spinning. Let me deal with the points that he has raised. First—and this perhaps goes to the heart of what is now emerging as a difference between the two parties—at this time in the economic cycle, and in the face of the extraordinary conditions that we face just now, it is right that we support the economy. Yesterday, the hon. Gentleman said in  The Daily Telegraph that he was against borrowing. That would have a profound consequence for the economy. He might want to have a word with the shadow Chief Secretary to the Treasury, who in the space of one single interview said:
	"Increasing borrowing is not a strategy for dealing with the recession",
	and, seconds later:
	"To increase borrowing to deal with an economic downturn—that's a perfectly sensible thing to do."
	The Conservative party is all over the place on the issue. In relation to interest rates, during one of the last debates that we had here I made it clear that the Bank of England has a remit sufficiently wide to enable it to take into account the wider economy. I also have to say to the shadow Chancellor that he said in the House on 14 October that he made it a practice not to comment on interest rates. Yet yesterday he was calling on the Bank of England to cut interest rates.
	It seems to me that the hon. Gentleman has not a clue about how to deal with this problem. What the public want is a clear course of action, and decisive action being taken. That is what we are doing. It is obvious now that the Conservative party and the hon. Gentleman are completely incapable of sticking to a decision and seeing it through.

Mortgage Lending

Mary Creagh: What recent assessment he has made of the support being offered by banks recapitalised with public funds to mortgage holders.

Yvette Cooper: The Government have agreed a range of commitments with the banks supported by the recapitalisation scheme. They include arrangements to make available affordable mortgage products over the next three years and to help individuals who are struggling with their mortgage payments to stay in their homes.

Mary Creagh: I spoke to Wakefield citizens advice bureau representatives yesterday and they told me that there is a three-week waiting list for people in our district who wish to be referred for help, particularly in respect of mortgages given out by Northern Rock and HBOS. Will my right hon. Friend make sure that she ignores a recent paper from the Conservative party that saw no need to regulate the provision of mortgage finance, as that would be truly catastrophic for this country's economy?

Yvette Cooper: My hon. Friend is right. I am aware of the concerns about people wanting more debt support and advice in our district, too, and that is the case right across the country. That is why we have substantially increased the investment in providing debt advice in the past 10 years. We are looking into what more we can do, because people need more support. My hon. Friend is also right to say that, at the heart of this, it would have been utterly irresponsible to cut the regulation of mortgage provision, as some in the Opposition seem to advocate.

Peter Tapsell: Do the Chief Secretary and her right hon. Friend the Chancellor agree that with the recapitalisation of our banks it was urgently needed that, as in America, there should be substantial cuts in interest rates, yet the current position is that our interest rates are 3½ per cent. higher than those in America? The present state of apparent paralysis of the Monetary Policy Committee—which I may say that I predicted in 1997 would be the case whenever there was a crisis—is adding to the problems facing mortgage holders.

Yvette Cooper: I know that Opposition Members opposed and voted against the independence of the Bank of England at the beginning, but after time they said that they supported it. Clearly, they have now changed their position again.

Peter Tapsell: I never changed.

Yvette Cooper: I have to say to the hon. Gentleman that I think it is right to have an independent Bank of England. That is why interest rates are 4.5 per cent. instead of the 15 per cent. that they reached at the end of the '80s and in the early '90s. It is right that the Bank should take these decisions, not only to ensure that it has the inflation target in mind but to support the economy in the way that its remit allows it to do.

George Mudie: Lloyds TSB was bailed out with £5.5 billion of Government money. Since then, it has refused to pass on the recent interest rate cut and has increased the rate for its tracker mortgages. In the past couple of days, it has stopped existing customers moving from repayment mortgages to interest-only mortgages, which is a first step in easing people's mortgage payments. As we are one of the biggest shareholders in this bank, does the Minister agree that at the next meeting we should ask our managers to review those destructive lending policies?

Yvette Cooper: My hon. Friend is right to raise questions about what is being done by the lenders who have help from the recapitalisation scheme. They have agreed to make available lending at 2007 levels, and we will put in place procedures to monitor how they are maintaining availability of mortgage lending. As hon. Members have said, it is right, given that the Government are taking action to support the banks, that the banks should take action to support mortgage holders and home owners across the country.

John Pugh: Why is the publicly owned Northern Rock now the most ruthless and unforgiving of any institution in pursuit of defaulters of any kind?

Yvette Cooper: As the hon. Gentleman will know, Northern Rock operates at arm's length and on a commercial basis, and it is right that it should do so. I am aware of concerns that have been raised by charities about Northern Rock's lending, and as a result it will meet some of those charities. They have particular concerns about its Together mortgages, which were, in effect, mortgages of over 100 per cent. It is right that all lenders, not only Northern Rock and those that have support from the recapitalisation scheme, should do everything they can to make repossessions, properly, a last resort, not a first resort. That is why we have introduced new court rules to strengthen the procedures to ensure that borrowers who get into difficulties can be offered alternatives and other support.

Emily Thornberry: Will my right hon. Friend reassure the House that she would never have welcomed the report by the right hon. Member for Wokingham (Mr. Redwood) calling for the complete deregulation of the mortgage market, because to do so would show a total lack of judgment that could be taught only at the Bullingdon school of being on another planet?

Yvette Cooper: My hon. Friend is right. To propose reducing the regulation of mortgage lending at such a time, a matter of weeks before the credit crunch hit, was not only irresponsible but did indeed demonstrate a lack of judgment.

Repossessions

John Howell: What assessment he has made of the repossession policies of banks recapitalised with public funds.

Yvette Cooper: We are concerned to ensure that all lenders do more to help people to stay in their homes at this difficult time. In addition, as part of the recapitalisation arrangements, HBOS, Lloyds TSB and the Royal Bank of Scotland have agreed to put additional funding into shared equity and shared ownership schemes to help borrowers who are in difficulties with repayments.

John Howell: Does the Chief Secretary not share my concern for constituents who see Members of Parliament as their only option to intercede with the courts to stop repossessions while they get their finances in order, because the banks have not allowed them time to do so? She may say what she likes about encouraging banks to change their policies, but how is she going to deliver?

Yvette Cooper: The hon. Gentleman mentioned the courts, and we have introduced new court rules and procedures that will make clear for the courts, and lenders, the sort of things that they will be expected to do before taking a repossession case, which the court will then ask them serious questions about. Those procedures were introduced during the past week, and will be an important part of ensuring that all lenders follow what is already best practice among some lenders in some cases. We are concerned about cases where that does not happen, and mortgagee repossessions should be a last resort in all cases. We do not want a return to the early 1990s, when the hon. Gentleman's party was in power and 140,000 families lost their homes in the space of two years.

Nick Ainger: Does my right hon. Friend agree that the current crisis stems from the fact that there is no trust or confidence between banks? They are not lending money to each other, so the wholesale markets have collapsed. The main reason for that is their exposure to substantial debt. As well as recapitalising the banks and underwriting their lending, is it not about time we insisted that they declare their exposure to the debt, draw a line under the matter, and move on?

Yvette Cooper: My hon. Friend is right in that a range of issues have led to the collapse in trust and confidence between banks, and what started with dodgy lending in the United States sub-prime mortgage market has infected financial institutions throughout the world because of the way in which they were lending to each other—bundling up assets—and they have now lost trust with regard to where those problem debts lie. We have urged much greater transparency, not just here but across the world. This is a global issue, and a global lack of trust has developed in the financial markets. It is important that we have a global approach to transparency, as well as to recapitalisation.

Mark Hoban: Last week the Chief Secretary said that she wanted repossessions to be a lot rarer. Yet despite reassurances last year about the quality of its mortgages, Northern Rock is repossessing more homes than any other lender. Is she saying that the reassurances she gave were wrong, or are her demands just hot air?

Yvette Cooper: If the hon. Gentleman had been listening earlier, he would have heard me say that Northern Rock has agreed to meet charities that have raised concerns about its position. It also has issues with some lenders who have taken out Together mortgages, which people are aware of; those are mortgages of more than 100 per cent.
	However, this is not simply a matter of Northern Rock. It is about every lender recognising its responsibilities to do the right thing by its borrowers and to look for alternatives. That might mean repayment holidays or looking for different mortgage rescue schemes, which is why this Government have introduced extra investment for mortgage rescue schemes, new rules for the courts to follow and increased support for mortgage interest for people who lose their jobs. That is the right thing to do, and I point out to the hon. Gentleman that on the day we announced the extra support for mortgage rescue schemes, his party was advocating increased tax cuts for millionaires' estates. That is the wrong priority at a time like this.

Employment

Karen Buck: What steps he is taking to ensure that his macro-economic policies support the provision of employment opportunities.

Stephen Timms: We are maintaining our commitment to high employment. There are more than 600,000 job vacancies currently, and most people who have lost their jobs are finding work again quickly. We have also announced £100 million over three years to train people facing redundancy so that they can move quickly into a new job.

Karen Buck: Mr Speaker, I wonder whether it might be possible for you to accept a note signed by everyone on the Labour Benches, because for the next 18 months we all intend to do little else other than attack the shadow Chancellor.  [ Interruption. ]

Mr. Speaker: Order. A genuine attack is one thing, but a personal attack on anyone's integrity will be stopped. I just put that on the record, but I know that the hon. Lady will not indulge in any personal attacks on anyone.

Karen Buck: Perish the thought, Sir.
	Yesterday I met representatives of the G15 group of major housing associations in London. They are concerned that the dip in house sales will have significant consequences for social house building. That has consequences for the construction industry and related trades. Will my right hon. Friend liaise with the Department for Communities and Local Government and others to ensure that construction—social housing and other forms of construction—goes ahead so that those infrastructure jobs are delivered in London and elsewhere?

Stephen Timms: My hon. Friend makes an important point. She knows from our announcements last month the high importance we attach to maintaining investment in social housing and bringing forward some of the investment that has already been committed. She will also know, through her extensive work on the problems of child poverty in London, about the good and imaginative initiatives of several housing associations to maximise the benefits of employment from house building and to work with their tenants to increase employment. She is right that we need to use the opportunity of investment in social housing, maintain our commitment to it and bring investment forward to increase employment.

Michael Jack: Will the Financial Secretary reflect on the fact that small and medium-sized enterprises in my constituency are working hard to maintain employment opportunities, but that dealing with punitive interest rates and arrangement fees, which many now have to face, is making that extremely difficult? In his discussions with the banks, will he agree a set of principles with them that recognise the needs of small and medium-sized enterprises in our country, especially given the effect of punitive interest rates on employment opportunities?

Stephen Timms: My right hon. Friend the Chancellor has discussed exactly that matter with the banks, recognising the importance of supporting small businesses through the period of turbulence in the world economy. Her Majesty's Revenue and Customs is also considering ways in which to support small businesses through this period, and I hope that we will be able to say something about that soon.

Frank Dobson: Does my right hon. Friend recognise that most people hope that the Government will continue to step up investment in social housing and ignore the views of, for example, the stupid, comfortably off collection of professors and ne'er-do-wells who wrote in  The Times that Keynesian overspending would not rescue the economy, and claimed that the Government's investing as they propose to do would lead to the serious misallocation of resources? Most people believe that investing in houses for people who do not have anywhere decent to live is a proper allocation of resources—much better than anything that came from the market forces in banking, which led to the problems that we all face today.

Stephen Timms: My right hon. Friend is absolutely right about the need to maintain our commitment to investment. We have put right a past policy of chronic under-investment in housing and in other public services. We now need to maintain our commitment to investing in public services, especially housing.

Crispin Blunt: If, after 15 years of benign conditions, a business went into more difficult times running a loss of nearly 10 per cent. on its turnover, its bankers might ask serious questions of its management and charge a risk premium on future lending to that institution. The United Kingdom is in that position. What risk premium will we have to pay to fund the Government's macro-economic policies during the recession?

Stephen Timms: As the hon. Gentleman knows, we have reduced debt. The IMF said:
	"For over a decade, the United Kingdom has sustained low inflation and rapid economic growth—an exceptional achievement...the fruit of strong policies and policy frameworks, which provide a strong foundation to weather global shocks."

Lindsay Hoyle: My right hon. Friend is well aware that construction sites are closed at the moment and that an announcement is due any day from Leyland Trucks about compulsory redundancies. What can we do to get Britain back to work and to ensure that we have procurement policies and a "Buy British" campaign? That is what we want from the Government. Will they launch that campaign? Let us back Britain, support British jobs and get Britain back to work.

Stephen Timms: We must work hard to ensure that people losing their jobs can return to work as quickly as possible. My hon. Friend will know that the consultation on the recent welfare reform Green Paper ended this week. It contains important proposals that we want to take forward. We want to support small businesses, as we have already set out, as well as companies large and small throughout the UK. However, the key is to ensure that if people lose their jobs, they do not get a long way from the labour market, as happened in the recessions under the Tories, when far too many people were pushed on to incapacity benefit, for example. That no doubt dealt with the short-term political problem, but too many of those people have never been able to get back into work. We need to keep people close to the labour market, so that they can get back into work as quickly as possible.

David Gauke: May I seek some clarity from the Minister on whether the Government are seeking to introduce a fiscal stimulus programme to prevent increases in unemployment? We all know that tax receipts go down in a recession and that welfare bills go up. Over and above those automatic stabilisers, however, do the Government believe that more borrowing will help the economy, or do they accept that we cannot spend our way out of a recession and that the main consequence of such a policy would be to make it harder for the Bank of England to cut interest rates?

Stephen Timms: It is right to support the economy at a difficult time in the world economy. We have a low rate of borrowing on the latest figures compared with other developed countries. That is why we are in a position to allow the rate of borrowing to increase, in order to support businesses and the economy.

Phil Wilson: Will my right hon. Friend share with the House his views on the belief held by some people that it is a function of capitalist markets to make money out of the misery of others? Is he aware, too, that people who believe that also believe that unemployment is a price worth paying?

Stephen Timms: I remember a time when views of that kind were expressed on the Government Benches. It is a matter of shame that some of those points were made. It is also a matter of deep regret that the Conservative party opposed the ban on short selling. I think that that position was a serious misjudgment.

Audit

David Heath: What assessment he has made of the effectiveness of audit in the regulation of financial institutions; and if he will make a statement.

Alistair Darling: Audit plays an important part in ensuring effective regulation of the financial institutions.

David Heath: How is it that the auditors of big companies, whose job is to ensure regularity and probity in the public interest, can apparently wave through the accounts of big companies whose finances, it then transpires, are so vulnerable and precarious? Is there not a suspicion that the concentration of audit of big companies in the hands of a few large accountancy firms has created far too cosy a relationship between those firms and the companies that they audit? If the Chancellor agrees with that concern, is he going to do anything about it?

Alistair Darling: I agree with the hon. Gentleman that the fact that there are comparatively few large accountancy firms that can carry out audits can be a problem. I am not sure that we can simply produce more auditors just like that, but as I have said on a number of occasions, the first line of defence in any regulatory system must be the board of directors of banks and other companies, too. Auditors also have their role to play, to ensure that people understand the risk to which they are becoming exposed. That is an important function that should never be overlooked.

Andrew Love: It is clear that there has been a collective failure of financial regulation, no more so than among the credit reference agencies. The issue is particularly complex, but what consideration has my right hon. Friend given to reform in this area to ensure that we do not see the sort of double standards that we have seen with credit reference agencies up to now?

Alistair Darling: I agree with my hon. Friend. He will recall that, really since last autumn, we have been calling for reform of the way in which credit rating agencies operate. That is something on which we need an international agreement; we cannot do it in one country. Indeed, given the nature of our banks and other financial institutions, there would need to be agreement here. We have been calling for that at meetings of the IMF and the Financial Stability Forum, and it is also something that we are pursuing actively through the European Union. Such an agreement is one of many reforms that need to be put in place, because we need to recognise that the financial markets today are very globalised. We therefore need to ensure, right across the piece, not only that we have a robust domestic regulatory regime, but that there is increasing international co-operation, as we are now seeing. More than 30 big banks are now being regulated by colleges of regulators from different countries, so that they all know what is going on and will therefore be better equipped to spot problems far earlier than in the recent past.

Stewart Hosie: The Chancellor will know that credit default swaps are credit derivative contracts between two counter-parties, and that they played a role in the collapse of Lehman Brothers and Bear Stearns. Effectively, these derivatives separate the management and ownership of the credit risk from the qualitative aspects of ownership of the underlying asset. They are very complicated, more so because derivatives now look not only at equity, commodity and currency markets but at more subjective risks as well, making them very volatile. How does the Chancellor envisage audit capacity being enhanced so that auditors can fully understand and report on the real risks to institutions and investors?

Alistair Darling: The point that the hon. Gentleman is making is that banks and their directors need to understand the risks to which they are becoming exposed. The problem is not necessarily the instruments themselves, because it makes sense to insure and reinsure against risks, which is perfectly okay as long as people know what they are doing. The problem is that those at the top of rather too many institutions did not seem to know what they were doing. The hon. Gentleman is quite right to say that we need to have effective audit. The directors of the banks need to know what they are doing, and—as I said last night in my Mais lecture—the supervisors and regulators also need better to understand what individual practices are doing and the exposures that banks are entering into, because this is not just a problem for individual banks. There are systemic problems, as has been graphically shown, and the hon. Gentleman has given the House two examples from the United States of institutions that are no longer with us.

Vehicle Excise Duty

Tim Loughton: What plans he has to make an announcement on vehicle excise duty as part of the pre-Budget report.

Angela Eagle: The changes to vehicle excise duty were set out in Budget 2008, and they are scheduled to be legislated on in the Finance Bill in 2009.

Tim Loughton: In West Sussex, during half-term week, the traffic levels on the A27 typically fall by about 20 per cent., due to the absence of the school run. This is related to the impracticalities of public transport, and is happening despite the fact that we are encouraging car sharing, which typically requires larger cars. Worthing also has a disproportionate number of elderly and disabled constituents who require larger cars for their mobility equipment. How does the Minister suggest that those constituents change their driving behaviour, given that they are to be faced with the treble whammy of swingeing increases in vehicle excise duty, plummeting second-hand car sale values, and no money being available to buy new, environmentally friendly cars?

Angela Eagle: It is important to remember that 55 per cent. of motorists in graduated VED will be better off, or no worse off, under these proposals. There are family cars and larger cars at or under the 160 g/km emissions level, below which the motorist will be either better off or no worse off.

Stephen Hesford: On the cost of motoring, has my hon. Friend made an assessment of the policy of a fuel duty escalator? If so, does she agree that it would be a ridiculous misjudgment to implement such a policy?

Angela Eagle: Under a policy of fuel duty stabilisers, we would now be putting an extra 5p a litre on fuel duty. That would directly affect prices at the pump, which would affect the cost of motoring far more than VED.

Justine Greening: The Government's planned unfair road tax rises will bring in £1.8 billion over the next two years. That is money that families could have done with in their own pockets, rather than the Government's. Are the Government not making a difficult situation worse for those families? The reality is that Ministers should ditch this road tax rise. It does not support families; it does not support the economy; and it does not even support the environment.

Angela Eagle: Why is the hon. Lady talking about that, when her policy would put 5p on fuel duty now, creating an increase that would feed right through to the pumps? That is bad judgment.

VAT

Jeff Ennis: If he will reduce the rate of value added tax on membership fees for health clubs and gymnasiums.

Stephen Timms: No. The Government do not think that this change would provide well-targeted, cost-effective support for their objectives. That view was supported by the 2004 Wanless report "Securing Good Health for the Whole Population", which argued that it would be ineffective and unfair. However, we keep these matters under review.

Jeff Ennis: I know that my constituent Mr. Ian Williams, who runs the Empress health club in Mexborough in my constituency, will be disappointed with that response. The health club is excellent and has full boxing facilities for Mexborough boxing club. It ticks all the right boxes as far as the Government are concerned in terms of health, well-being and community cohesion, and yet Mr. Williams is finding it increasingly difficult to compete with Denaby sports centre down the road, a local authority trust facility which is VAT exempt. Given my right hon. Friend's response, will he look at the issue again? If he is not willing to do so, will he give me any other financial advice that I can offer to Mr. Williams, because this facility will close if we cannot get additional help to it?

Stephen Timms: I am aware of concerns about competition with regard to leisure centres. HMRC has discussed that with some of those involved, but of course I would be happy to talk to my hon. Friend about it. It may well be that the help that we have talked about today for small businesses will be valuable in that particular case.

Counterfeit Currency

Christopher Chope: What estimate he has made of the number of counterfeit pound coins in circulation; and what steps he is taking to remove them from circulation.

Ian Pearson: The latest survey conducted by the Royal Mint indicated a potential counterfeit level of around 2 per cent. The Royal Mint continues to work closely with the police, banks and cash-in-transit companies to introduce more robust methods for detecting and removing counterfeit coins from circulation.

Christopher Chope: Is not the biggest scandal not the number of counterfeit coins but the fact that each of these counterfeit pounds in the pocket is worth 14 per cent. less than they were at the time of the last general election? Is not that 14 per cent. devaluation of the pound a tragedy for our country and a reflection of the failure of this Government's economic policies?

Ian Pearson: The hon. Gentleman is imaginative in trying to get a dig at the Government. The key point, of which he will be aware, is that we have robust coinage in this country. We have strong enforcement mechanisms to ensure that counterfeit coins and notes are rigorously followed up. The counterfeit note rate represents something like 0.013 per cent. of the average stock of notes in circulation. We take vigorous action in these areas, and I am sure he welcomes that.
	Topical Questions

Karen Buck: If he will make a statement on his departmental responsibilities.

Alistair Darling: The core purpose of the Treasury remains to ensure the stability of the economy to promote growth and to manage the public finances.

Karen Buck: My right hon. Friend may be aware of the Help for Heroes campaign, which is raising money to support those injured and disabled in the service of our country. Next week, contestants on "The X Factor" will release a charitable single to raise money for that excellent cause, but as things stand they are liable for VAT on the proceeds. I wonder whether there is anything that he can do to help.

Alistair Darling: I very much support the Help for Heroes campaign and the efforts made by contestants on the "The X Factor". In recognition of that, I am proposing effectively to waive VAT on the sale of the singles. We will do that by making a donation to the fund equivalent to the value of the VAT.

Andrew Rosindell: The Chancellor's predecessor, the Prime Minister, once stated that losing control of public expenditure does not help the poor. How can the Chancellor reconcile that with his plans to increase both borrowing and public expenditure? Will he give an undertaking that he will not increase taxation, which would again harm the poor in our country?

Alistair Darling: If the hon. Gentleman thinks that our policy of supporting the economy is wrong, he should have a word not only with the shadow Chief Secretary, but also with the leader of his party, who said on the "Today" programme on 20 October that at a time like this
	"borrowing goes up. That is inevitable...you have to allow that to happen. Those automatic stabilisers as Keynes called them, those have to operate."
	If it is good enough for the Leader of the Opposition, it ought to be good enough for someone who, I presume, supports him.

Mary Creagh: I recently visited TEi Engineering in Wakefield, an engineering firm that is training the next generation of young apprentices, men and women, to be welders to build the next generation of eco-power stations. It is desperate for further investment to increase the skills of its staff. Does my right hon. Friend agree that cutting £1 billion from the Train to Gain programme would be catastrophic for firms across the country?

Alistair Darling: I agree with my hon. Friend. Maintaining investment in training is essential. As we get through the present difficulties, the opportunities for this country and, importantly, for the people of this country are immense.
	I also agree with what my hon. Friend said about nuclear power. At a time like this, when we must reduce our dependence on imported gas and oil, it is imperative that we invest in the new generation of nuclear power stations. That is another example of the Conservative party's inability to face up to the difficult decisions that we need to make for the benefit of the people of this country.

Vincent Cable: The Chancellor knows about the enormous anxiety in charities and local government about the billions lost in Icelandic banks, and the thousands of British savers whose savings disappeared because they were routed through Kaupthing Isle of Man. Now that he has confirmed that he was informed of the difficulties of Icelandic banks months ago, will he place in the House of Commons Library a full record of the information that the Treasury was given over the past year, and the action that it took on the back of it to protect British savers' interests?

Alistair Darling: As the hon. Gentleman knows, the Financial Services Authority, which is the regulator of banks, building societies and other financial institutions, monitors what is happening in institutions all the time. That is its job. It is not surprising that, from time to time, the FSA may have concerns about institutions. It speaks to those institutions, and it gets them to try to address those concerns.
	As for the Icelandic banks, the fundamental problem was not here but in Iceland. As the hon. Gentleman knows, Iceland has effectively had to take over its banks. I have been trying to persuade the Icelandic authorities to ensure that they honour their obligations to savers in this country under their compensation scheme, and also that they treat creditors in this country fairly and on the same footing as Icelandic creditors. I have had a number of discussions with the Icelandic Prime Minister and Foreign Minister, but so far we have not been given those assurances, which is why I have had to step in to guarantee retail depositors and savers in this country. That is where our obligation lies. I will continue to do whatever is necessary to protect people who find themselves in that position, but what we really must do is encourage the Icelandic Government to conclude their discussions with the International Monetary Fund. Some of those discussions will, I hope, ensure that British creditors—indeed, all creditors outside Iceland—are treated fairly, and in the same way as those living in Iceland.

Anne Snelgrove: Is it bad judgment to oppose Government action to protect small savers' money in banks and building societies, or just another example of social justice from the perspective of the Bullingdon club?

Mr. Speaker: Order. The hon. Lady really should cut that behaviour out.

Andrew Robathan: During the recession of which the Prime Minister has spoken, tax receipts are likely to fall rapidly. What assessment has the Chancellor made of future tax receipts, and is there any truth in reports in the newspapers that the Treasury is already considering—beside borrowing—tax rises and cuts in public services?

Yvette Cooper: As I think is clear to everyone, when a global credit crunch hits, it hits not only tax receipts from the financial sector but tax receipts from such things as stamp duty. We have made it clear that it is right to maintain public spending and increase borrowing to support the economy at a time like this, but we are also cutting taxes this year, for example through increased tax allowances and by freezing fuel duty below the level of inflation. That is in contrast to the policy of the hon. Gentleman's party, which would increase taxes on fuel duty this year.

Mark Todd: One third of the work force in South Derbyshire are employed in manufacturing industry in companies such as Toyota, Rolls-Royce and JCB, which invest heavily in the future in terms of both capital and development costs. In the context of the design of a fiscal regime that will support such businesses, will the Chief Secretary comment on alternative suggestions whose implementation might improve some of the incentives for investment of that kind?

Yvette Cooper: I think that my hon. Friend is referring to tax reliefs for investment and allowances for business. I think it right for us to support businesses through what is a difficult time for not only the world economy but the United Kingdom economy. That includes, for manufacturing industry, tax allowances for investment, and claims that cutting those allowances would help businesses are simply disingenuous.

David Evennett: We all know the value of charities within our society and, in recession, people will need the support of charities even more. I understand that Treasury Ministers have recently met representatives of the sector to discuss possible measures to support it. Will that support be forthcoming soon and, if so, where?

Alistair Darling: There was a meeting with charities in relation to the Icelandic banks and those discussions with charities are continuing. We are aware of the position in which they find themselves and, as I said to the hon. Member for Twickenham (Dr. Cable) a moment ago, if Iceland can resolve its problems, that will be helpful for all creditors. We are aware of the problems and the discussions will continue.

Dennis Skinner: Is the Chancellor aware that it makes a lot more sense to borrow money to create jobs and to help small businesses rather than spending the whole summer cadging money for the Tory party to shore up its finances?

Mr. Speaker: Order. I thought the hon. Gentleman was going to give us a good example, but that did not happen.

Alistair Carmichael: When the Minister met the delegation that I led on 4 June, in a positive meeting, she agreed to undertake an examination of the case for fuel duty derogation for remote island communities. It is now a number of months since that meeting. What progress has she made? When can we expect a conclusion? Although the Prime Minister's recent remarks on the cost of fuel were very welcome, people in my constituency would love to pay the price that he was complaining about.

Angela Eagle: Obviously we understand the issues, particularly in island communities. We are continuing to look at the matter, and we will make announcements in due course, but I hope he will recognise that there has some been some easing of fuel prices since the time we met. I understand that his community has to face extra costs, and I assure him that we are focusing on the matter.

Harry Cohen: Will the Chancellor confirm that the latest estimate from the Bank of England of worldwide write-offs is £2.8 trillion? Is not a cause of that the uncontrolled creation of credit by private financial interests, which has jeopardised the public and the public interest? There have been a lot of dubious financial practices invoked as part of that. When will we get a full-scale analysis from the Treasury of all the causes, so we can make sure that it does not happen again?

Alistair Darling: I agree that there are lessons to be learned as a result of what has happened over the past few years. It is important that we act on that and, as I said last night at the Mais lecture, I hope to be in a position to publish some preliminary conclusions and proposals in the not-too-distant future.

Richard Ottaway: The Minister may use anti-terrorism laws to throw hecklers out of the Labour party conference, but does he not consider it utterly inappropriate to use them to freeze the assets of foreign banks? Can he not see that that impacts on the Government's reputation and the country's reputation? I could not care less about the Government's reputation, but I care about the country's reputation.

Alistair Darling: The legislation that we used was approved by Parliament and I believe that it was necessary for us to take action to safeguard the position of creditors in the United Kingdom. It is important that we take action, because there is a clear public interest there.

Albert Owen: The Prime Minister has made positive statements, welcomed by Members and by people across the country, about oil companies and utility companies passing on the cut in oil prices to their customers. Can Treasury Ministers encourage banks to pass on the recent, and future, cuts in bank rates to its mortgage borrowers and customers?

Yvette Cooper: My hon. Friend is right. It is important that, with world oil prices coming down, those cuts be passed on to consumers because, as we all saw, the price increases were certainly passed on to consumers. We have seen many petrol companies passing on price cuts, and it would be good to see all petrol companies bringing prices down right across the country. Gas and electric companies could also do more to pass on reductions in oil prices in their fuel bills. He is also right that it is important to ensure that the banks do their bit, particularly given the amount of support that the Government are providing for the banking system as a whole to keep it safe, and we will be setting out further procedures to monitor the way in which banks can do that in future.

Patrick Cormack: Does the Minister accept that for many small and medium-sized businesses the last straw in these difficult times is having to find the money to pay the rates on empty properties? Please will the Government recognise that as an urgent problem?

Angela Eagle: We are aware of the worries about empty property relief, but it is important to remember that the vast majority of that relief went to the City of London and four other areas. We are looking into the matter, and we understand the difficulties, but it is also important to remember that when 100 per cent. relief was given, buildings remained empty for a very long time and therefore were not recycled, which is economically inefficient, and that the areas that had the most access to the relief had some of the highest rents in the world.

Louise Ellman: Does my right hon. Friend recognise the difficulties being faced by businesses in ports such as Hull and Liverpool now that they have been presented with three years of backdated business tax bills? What steps is he taking to deal with that injustice?

Stephen Timms: My hon. Friend the Minister for Local Government and I talked about this matter with the Treasury Committee yesterday, and we said that we were looking at ways to enable companies that had been affected to pay the due amount over a longer period than would normally be the case. What has typically happened is that the rates liability for the port operators has been reduced, whereas the liability for the occupiers has been increased. There has been some rebalancing there, and the port operators also have a responsibility to consider whether they can help.

Philip Hollobone: Kettering borough council is organising a credit crunch summit to which it is inviting local businesses, residents, banks, building societies, housing associations and others to discuss what steps can be taken to minimise the impact of the recession on local residents and businesses. Would the Chancellor like to applaud this initiative?

Alistair Darling: It is important that we consider what we can do to help businesses, as we have been discussing during Question Time, and individuals. I repeat what I said earlier: steps such as reducing the amount of tax being paid by basic rate taxpayers and postponing the fuel duty increase will all help. I should also say to the hon. Gentleman, however, that it is important as well that the Government are prepared to put their money behind what they say, which means we have to allow borrowing to rise. The Conservative party is now saying that we should not borrow, which would have consequences, and sooner or later it will have to spell them out—or perhaps not, if, as with so many other Conservative policies, it adopts it one week, and then drops it the next.

Business of the House

Theresa May: I welcome back the Leader of the House; we are very pleased that she has made a full recovery. Will she give us the forthcoming business?

Harriet Harman: The business for next week will be as follows:
	Monday 3 November—Remaining stages of the Dormant Bank and Building Society Accounts Bill [ Lords].
	Tuesday 4 November—Remaining stages of the Employment Bill [ Lords].
	Wednesday 5 November—General debate on work and welfare.
	Thursday 6 November—Topical debate: subject to be announced, followed by general debate on public engagement in fighting crime.
	The provisional business for the week commencing 10 November will include:
	Monday 10 November—Opposition day [20th allotted day]. There will be a debate on a Liberal Democrat motion. Subject to announced.
	Tuesday 11 November—If necessary, consideration of Lords amendments, followed by general debate: subject to be announced.
	Wednesday 12 November—Motions relating to House of Commons business.
	Thursday 13 November—If necessary, consideration of Lords amendments, followed by general debate: subject to be announced.
	I should also like to inform the House that the business in Westminster Hall for 13 November will be:
	Thursday 13 November—A debate on the report from the Culture, Media and Sport Committee on harmful content on the internet and in video games.

Theresa May: Earlier this month the shadow Justice Secretary, my hon. Friend the Member for Arundel and South Downs (Nick Herbert), tabled a written question to the Ministry of Justice on rates of reoffending by prisoners on early release. By 10.30 pm on Monday, he had not received an answer, yet that night the  Daily Mirror was going to press with details of the answer. Answers to written questions should surely be given to Members before they go to the press, so what action is the Leader of the House taking to ensure that Ministers follow that rule, respect Parliament and do not leak answers to the press for their own political convenience?
	The Leader of the House has just announced a debate on work and welfare, which follows our Opposition day debate on unemployment. On Monday, the House of Lords will hold a general debate on the economy. When will we have a full debate in this House, in Government time, on the state of the economy? Apart from other things, that would give Members an opportunity to debate the Chancellor's Mais lecture, which was described in  The Times as being
	"as striking for its lack of introspection as for its vagueness in indicating a way forward. The Government has repeatedly proclaimed an end to boom and bust, yet has produced both."
	We need a debate.
	Continuing on the state of the economy, it is reported today that one in 10 small businesses are in danger of going under. Members need to be able to hold Ministers in the Department for Business, Enterprise and Regulatory Reform to account in this House, but the Secretary of State sits in the House of Lords and there is no Minister in this House at Cabinet level. What is more, there is only one Minister in this House dedicated solely to the Department. At this time, when even the Government have admitted that we are heading into a recession, that is simply not good enough. The Select Committee on Business and Enterprise is rightly concerned by that unprecedented lack of accountability, so may we have an urgent statement from the Leader of the House explaining what action she will take to ensure that there is proper accountability by that Department to this House?
	May we have a debate on the BBC? There is public outrage at the behaviour of Jonathan Ross and Russell Brand, yet for several days the BBC seemed like a rabbit caught in the headlights, unable to act. We need a debate on the BBC's handling of the incident, because licence fee payers have a right to know what went wrong and how similar incidents will be avoided in future.
	On 7 February, the House agreed a Conservative resolution that the European Scrutiny Committee should meet in public, but I understand that it has been holding the majority of meetings in private, that members of the public have effectively been prevented from attending and that the Committee has now decided to ask the Leader of the House to let it meet in private in future. It is an important Committee and should be open to the public, so may we have a statement from her on why it appears to have been flouting the will of the House?
	There are reports that the Cabinet is divided over a third runway at Heathrow. Indeed, the right hon. and learned Lady herself is reported as questioning the Government's decision for a third runway. Our policy is clear: no to a third runway and yes to a high-speed rail link. Today it is reported that the Government are adopting our policy on high-speed rail. May we have a debate on Heathrow, so that we can find out whether the Government are going to make a U-turn and adopt our policy on a third runway as well?
	Finally, two weeks ago the Leader of the House promised a statement on Equitable Life in the autumn. The clocks have changed and London has had its first snowfall. Does she still think that it is autumn, or will she now give us a date for a statement on Equitable Life?

Harriet Harman: I thank the right hon. Lady for her best wishes to me as I was off with flu last week. I have to confess that I was apprehensive that my failing to reply to business questions might cause alarm and despondency among all parties. However, I was able to watch a few moments on television last week and detected that that was far from the case, and that the House felt it was in very safe hands being looked after by my deputy, my hon. Friend the Member for Rhondda (Chris Bryant). I thank him for looking after the shop while I was away.
	I agree with the right hon. Lady's proposition that written answers should go to the Members concerned before they are given to the press. I shall look into that point and write to her about it, because the issue is a serious one. A Department has to be sure that its answer, which it is free to give to the press, has first reached the Member directly; the Member should not see it in a newspaper first.
	The right hon. Lady mentioned the economic situation. Whether in statements from the Treasury or from the Department for Business, Enterprise and Regulatory Reform, in answers at Prime Minister's questions, in answers at Treasury questions this morning or in debates such as this afternoon's topical debate on businesses and the regions or last week's topical debate on skills and employment, the economy is before the House for debate and discussion, and Ministers are being held accountable at all times, and rightly so.
	The right hon. Lady will know that that the director-general of the BBC is today meeting its board of trustees, who represent the interests of licence holders.
	In its procedures, the European Scrutiny Committee follows the resolutions passed by this House. There is no question of that Committee flouting the will of the House, because it is not in a position to do so: it has to comply with the Standing Orders at all times. Indeed, those Standing Orders were introduced for a temporary period and will come back to the House to be renewed, re-debated and discussed on 12 November, as I announced, so the right hon. Lady, like all hon. Members, will have an opportunity to make further points then.
	The Government's position on Heathrow is that London has fewer runways than other European capitals. In principle, we are in favour of an additional runway at Heathrow, but we have always said that this was subject to environmental concerns, in particular, and to extensive consultation and the gathering of scientific and other evidence. This is being considered by the Secretary of State for Transport.
	As for the investment in rail infrastructure being the Conservative party's idea, that is a laugh. When we took over, the infrastructure—the network, the stations and the rolling stock—was in a state of disrepair and investment was lacking. We have invested in our national infrastructure. That has been part of our investment in this country while the sun shines, and we will not cut that investment. We will continue it, because it is important to the economy.
	The right hon. Lady also asked about Equitable Life. I have given her an answer to the question about the Government's accountability to the House on all economic issues and the opportunities for this House to debate them. She will remember that the Equitable Life issue arose out of a structure that the company adopted in the 1970s. In the 1990s, that structure meant that a problem surfaced: Equitable Life was not able to meet its obligations to its policyholders. The parliamentary ombudsman spent four years investigating the background to this matter, and produced a weighty report this summer. After four years of investigation into a very complex issue, it is right that the Government should consider the matter seriously and should have the time to do so. As I said, the report will be given to the House this autumn by the Chancellor; he will give his decision to the House. Incidentally, the parliamentary ombudsman is giving evidence to the Public Administration Committee this morning.

David Taylor: As a member of the Select Committee on Environment, Food and Rural Affairs since its creation, I have long been disappointed that we devote relatively little time to matters of food and diet. This is against a backdrop of an increase in obesity and diet-related diseases, particularly among younger people, which is linked to foods that have high salt, sugar and fat content. Will the Leader of the House say whether time could be allocated to debate the Food Standards Agency report on food labelling, which considers some of the options that exist, such as guideline daily amounts and traffic-light systems, so that we can get the retail industry behind whatever the chosen best option is and start to tackle some of the health and social problems that we face?

Harriet Harman: My hon. Friend makes a very important point about a what is a major public health issue not only for DEFRA but for the Department of Health and the Department for Children, Schools and Families. The latter is especially concerned about child health and what happens in schools. Labelling also raises questions about information for consumers, especially parents. I shall therefore consider whether we can have further opportunities to debate the matter, possibly in a topical debate.

Simon Hughes: I too welcome the Leader back and hope that she makes a full recovery soon.
	I join the Conservative shadow Leader of the House in requesting full-day debates in Government time on the economy and on Heathrow. On the latter, there does not appear to be unanimity in the Government, so there must be some hope that we can change their mind.
	Last week, protests were held, yet again, over the short period allowed for the Report stage of Bills. Today the Government announced two Bills returning to the House on Report and Third Reading next week. I bring to the Leader's attention—I do not know whether she was here at the time—the fact that a further two Bills were not given enough time for debate on Report. At the last minute, the Government tabled loads of their own amendments to the Local Transport Bill. There were nine groups of amendments, but we reached only three, and issues such as bridge tolls, road charging and local transport plans were not properly discussed.
	The same happened with the Climate Change Bill—we did not discuss 2020 targets, charges on carrier bags or refundable deposits on recyclable containers. Please will the Leader do what she led us to believe she would do and ensure that we have a timetable that allows Labour Members and Opposition Members the chance to debate all the issues on Report?
	For the week after next, the Leader has announced, cryptically, a debate on the business of the House, by which we understand that we will have a debate on the Government's wish to set up Select Committees for the English regions—

Patrick Cormack: Which is rubbish!

Simon Hughes: Given the controversial nature of the proposal, and the fact that it got through Committee only by a majority of one and with a lot of good luck—

Theresa May: And with the Chairman's casting vote.

Simon Hughes: Indeed. And given that on Tuesday night, as the Deputy Leader knows, real concern was expressed on both sides of the House about the number of Members available to serve on Select Committees, may we, before Christmas, have a debate on Select Committees and their numbers before we set up the new Energy and Climate Change Select Committee, which we have agreed on, and before debating any regional Select Committees for England? It is a nonsense to try to squeeze a quart into a pint pot. The Government might be wise to back off and think again.
	As we all know, next Tuesday sees the United States election. The Liberal Democrats look forward unanimously to the election of Senator Obama as the next American President, and hope that he will be a beacon of light and hope in a very gloomy and threatening world. May we have a debate as soon as is practical after Tuesday on the effect of the American presidential election on worldwide issues? It is the most important election outside this country to people here, and I hope that we can have an early debate on its foreign policy implications.
	Next Thursday sees the important by-election in Glenrothes. I do not know whether the Leader has had a chance to visit it and the surrounding villages—

Mr. Speaker: Order. The hon. Gentleman should be careful what he says about a by-election.

Simon Hughes: I shall, Sir.

Mr. Speaker: I know he will. He'd better.

Simon Hughes: The Leader might, or might not, know that rail fares in Fife are greater, mile per mile, than anywhere else in Scotland. May we have a debate on the rail pricing structure across the UK? If we want to encourage people to use public transport, it is no use their discovering that it is far more expensive in some parts of the country than in others.
	Lastly, there is great concern about the effect of the recession on small businesses. We have waited six months since the tenders for the Post Office card account went in. May we therefore have a debate, before the decision is made, about the implications for the future of thousands of post offices if the card account contract does not go to the Post Office? That would allow us to express our hope that the Government will see sense and keep the remaining post offices viable rather than threatening them with another potential death blow.

Harriet Harman: The hon. Gentleman asked for further debate on the economy and on Heathrow. Of course, his party has an Opposition day the week after next, so he could consider those as topics for debate on that day.
	The hon. Gentleman talked about allowing adequate time for the scrutiny of Government business, and mentioned in particular the Climate Change Bill and the Local Transport Bill. We must ensure that at all stages legislation is properly scrutinised and that we bring as many Bills forward as possible in draft form so that before they are even introduced formally into this House there is proper pre-legislative scrutiny. That has assisted greatly in the scrutiny that the House gives to legislation. That was the case with the Climate Change Bill. In addition to Second Reading, it is important that there is full scrutiny in Committee and on Report. It is also important that we have post-legislative scrutiny. It is not just about what we say about the intentions of a Bill: we should look back and see whether what was said in the House by Government or Opposition Members about our aspirations for the legislation was borne out in practice. We need to ensure that across the piece there is proper scrutiny at all stages and we seek to do that.
	The hon. Gentleman mentioned the business of the House that will come before the House on the 12 November and raised the issue of regional Select Committees. I would have thought that he would want better scrutiny of important activity in the regions. Billions of pounds are being spent by regional health authorities, regional development agencies and highway authorities, and that profoundly affects individual regions. Surely it is right that there is accountability to the House when millions of pounds of public money are involved. However, I do not want to pre-empt the debate, which is recognised to be controversial. We will try to ensure that we place the resolutions before the House as early as possible so that Members have a chance to look at them before they come steaming in to disagree with regional accountability. How many Members will sit on the Committees will obviously come within the scope of the resolutions relating to regional Committees.
	The hon. Gentleman also mentioned the United States election. Foreign Office questions are a week on Tuesday, but I want to highlight one point about that election. It looks set to have very high turnout involving people who have previously not necessarily voted. They have registered to vote and then gone out to vote. We should all be preoccupied with tackling the lack of registration in the UK, particularly in inner- city areas and among poorer people, and with tackling low voting turnout. If we can learn anything from the American elections about getting more people—and particularly more young people—to vote, we should try to do so.
	The hon. Gentleman will be reassured to discover that I shall be going to Glenrothes on Tuesday.
	On the Post Office card account, the hon. Gentleman asked for a debate in order to affect the Government's decision. The post office network is important, and the card account is important for the post office network. The hon. Gentleman will know that the Post Office is on record as having said that it has put in a strong bid for the contract, but he will also know that there are legal structures for such a public procurement exercise. Asking for the views of the House as a way of contributing to that public procurement process cannot be done. The decision is subject to the legal process at the moment, and when it has been made it will be brought to the House.

David Winnick: May I ask about a rather sensitive and no doubt controversial matter? Could Government time be provided for a debate on assisted suicide in some cases of terminal illness? Will my right hon. and learned Friend accept that such a debate in the House would be well timed, whichever line we took? The House of Lords debated the subject some two years ago and we should reflect our point of view as soon as possible, so I hope that debating time can be provided.

Harriet Harman: The Government have published our pre-legislative programme in advance of the Queen's Speech to give people the opportunity to propose a bit of legislation, if they think it needs to be included in the programme. Of course, from time to time there are Bills whose long title allows such a provision to be brought forward through a Back-Bench amendment. My hon. Friend will know that the case that has been before the courts, in which a judgment was issued this week, is subject to appeal. There will be further judicial consideration of the subject. The situation under the criminal law is certainly unusual. The criminal offence of assisting somebody's suicide is unique as it is the only part of the criminal law where it is an offence to assist the commission of something that is itself not an offence. I know that there is concern about the subject, and we will no doubt have a further legal ruling.

Patrick Cormack: In the reassuring, avuncular presence of the Leader of the House's right hon. and eternal Friend the Deputy Chief Whip, will she have some conversations with those who arrange the business of this House to try to give real priority to the issues that concern our electorates? They expect us to debate foreign affairs; they expect us to debate the economic situation; they do not expect us to waste time on the ridiculous and stupid idea of regional Select Committees that we do not have sufficient Members to man adequately.

Harriet Harman: We do find time to debate the important issues of foreign affairs and the economic situation. That is one of the issues that we have chosen for weekly topical debates. I do not think that properly holding to account the agencies that implement public policy in the regions is a waste of time, but the hon. Gentleman will have an opportunity to make his views known when the resolutions are brought before the House.

David Chaytor: At the end of next month, the ballot papers will go out to every household in Greater Manchester for the referendum on the future of public transport in the region. The proposals include an element of peak period congestion charging. As we have been reminded, in our discussions on the Local Transport Bill on Monday we were not able to consider the amendments on road pricing. Will my right hon. and learned Friend find time for a debate on road pricing and congestion charging so that we can have the opportunity to see how those policies fit in with the policies agreed in the Climate Change Bill on Tuesday, which set stringent targets for emission reductions? It would offer a chance for those who supported the Climate Change Bill but who oppose road pricing to justify their position.

Harriet Harman: My hon. Friend makes a very important point. The provision for local people to choose a congestion charge was enabled in the Local Transport Bill not only to allow people to tackle congestion, which can be a big drag on businesses and can hold back economic growth in particular cities, but to enable cities to contribute to reduced carbon emissions. That provision has now been included in the Bill, so once the Bill becomes law it will obviously become a matter for local decision making.

Richard Younger-Ross: May I preface my question with a comment? The right hon. Member for Maidenhead (Mrs. May) referred to the workings of the European Scrutiny Committee. As a member of that Committee, I can say that it has never met in private, except under the conditions debated and set by the House.
	The Government stated that they are looking to bring forward capital schemes. May we have a statement from the Secretary of State for Transport on whether such schemes as the Kingskerswell bypass will be considered for early construction?

Harriet Harman: I thank the hon. Gentleman for making it absolutely clear that the shadow Leader of the House was completely wrong to say that the European Scrutiny Committee had flouted the rules of the House. She owes an apology to the Chair of the Committee, who would not think it his business to flout the rules of the House when chairing the Committee, and to the Clerks of the Committee. Even if the Chair did decide to flout the rules of the House, they would play no part in that. She owes all the members and Clerks of the Committee, and its Chair, an apology. Apologies appear to be the order of the day in the Conservative party. Let us see whether she can join the shadow Chancellor in making an apology.
	The hon. Member for Teignbridge (Richard Younger-Ross) made an important point about bringing forward capital schemes, and all Members will be concerned to identify capital schemes that could be brought forward in their local area. We firmly believe that it is not the right time to cut public investment, because such investment helps the economy to grow, and because we do not want to do anything that takes money out of the economy at a time when it needs the stability of continued public investment. This is yet another issue on which the official Opposition simply cannot make up their mind.

Jeremy Corbyn: Will the Leader of the House find time for a debate, or at least a statement, on the situation facing the people of the Democratic Republic of the Congo? The war there has cost more than 5 million lives in the past decade. Fighting has broken out again in the east, and although there appears to be some kind of temporary ceasefire, we need a statement from the Government on what they are doing to ensure that the ceasefire holds, and that further aid flows. A terrible plight of starvation and homelessness faces refugees in the east, and as much as possible must be done to help them through this dreadful crisis.

Harriet Harman: My hon. Friend makes an important point. There is great apprehension and foreboding about the unravelling of the situation, and an absolute determination that the international community should not, as has happened in the past, fail people in central Africa when such situations emerge. I have said that the House needs an opportunity to discuss economic issues and the economy of this country, and I will take his question as a suggestion for the next topical debate.

Nicholas Winterton: While the economic crisis and the credit crunch have dominated the attention of Members and the country—I believe that a full, two-day debate on the economy should be held—should we forget the suffering of the people of Zimbabwe? Despite the intervention of ex-President Thabo Mbeki of South Africa and the Southern African Development Community, ex-President Mugabe still clings to power. Is it not time for a full-day debate on the subject? It is our duty to represent the interests of the people of Zimbabwe, as we brought about Mr. Mugabe's emergence as President, so we should discuss the issue and perhaps indicate what action should be taken.

Harriet Harman: The people of Zimbabwe expressed their view in the election in March. Hon. Members on both sides of the House—the hon. Gentleman is not least among them—are concerned that the will of the people of Zimbabwe should be reflected in the governance of their country. We have sought opportunities for the House to debate the issue. We had a topical debate and a written ministerial statement from the Foreign Secretary on the subject in July. Oral statements were made on 12 and 15 September, and the Lords Foreign Office Minister met the all-party group on Zimbabwe on 7 October. There will be oral questions to the Foreign Secretary the week after next, and the issue can be raised again then. We remain deeply concerned; there is intense Government action and international action. The situation is far from resolved.

Chris Mullin: May I endorse the point made by the hon. Member for North Southwark and Bermondsey (Simon Hughes) about the need to give a more reasonable amount of time to the Report stage of major Bills? It is not as though we are short of time in this House; it is currently sitting for less time than it has done for as long as anybody can remember.
	As regards the eastern Congo, my right hon. and learned Friend the Leader of the House suggested, in response to my hon. Friend the Member for Islington, North (Jeremy Corbyn), that the matter be the subject of a topical debate. We need a statement from the Foreign Secretary on what this country can do to assist in averting the catastrophe, which is one of the greatest of recent times; 3 million to 4 million people have died in the Congo in the past 10 or 15 years. I appreciate that our influence is limited, but we really need to hear from the Foreign Office about what we can do, in co-operation with the EU and the UN, to help alleviate that catastrophe.

Harriet Harman: My hon. Friend reinforces points made by other hon. Members about the need for adequate time, and we are well aware of those points. We need to get Government business through, to have it properly scrutinised, and adequate time to discuss amendments and new clauses tabled by Back Benchers on both sides of the House on Report.
	In relation to the Congo, I will have a discussion with my right hon. Friend the Foreign Secretary on how best to make sure that the House is kept up to date and has an opportunity to make its view known, through a statement, a topical debate or some other means.

Hywel Williams: I echo those calls for a debate about the Congo. Ban Ki-moon said that the violence overnight, reported this morning, is in danger of creating a humanitarian crisis of catastrophic proportions. The UN forces are undermanned, and they call for further reinforcements. What can the Government do to provide those reinforcements?

Harriet Harman: I take the hon. Gentleman's question as reinforcing the point that the House wants to hear from the Foreign Secretary on the issue; I take that point.

Judy Mallaber: May I endorse all the comments on the appalling situation in the Congo, which I visited with other Members?
	Moving on, in this anniversary year of women's suffrage, may I urge my right hon. and learned Friend, in her capacity as Leader of the House, to do everything in her power to promote the wonderful new exhibition on suffrage that has just been set up by the Admission Order Office? It includes the scarf that Emily Wilding Davison was wearing when she fell under a horse at the Derby, a medal of Emmeline Pankhurst and a picture by Sylvia Pankhurst. Will my right hon. and learned Friend do all she can to promote the exhibition, and ensure that the tour guides show the exhibition to our schoolchildren and other parties when they visit and tour the House?

Harriet Harman: My hon. Friend has made the point extremely well, and I thank her for doing so. We still have further to go; although woman have the vote, there is still unequal representation of women.

John Bercow: There is the Speaker's Conference.

Harriet Harman: That is right; Mr. Speaker, you are holding a Speaker's Conference on how we can tackle the issue of the under-representation of women and minority ethnic groups in the House of Commons, which should reflect the country as a whole. I looked at the figures just this morning. It is wrong that only 27 per cent.—fewer than one in three—of Labour Members of Parliament are women. However, it is absolutely shameful that only 9 per cent.—fewer than one in 10—of Conservative MPs are women. We all have a long way to go, but some have a great deal further to go than others.

Anne Main: May I ask the Leader of the House to give the House time to debate the Government's decision to prop up the housing market through its housing clearance policy? The policy will cost several hundred million pounds, and much of that will come from other pots of money, including those set aside for small businesses. Given that £13 million went to one private developer this month, we should scrutinise the issue at the highest level.

Harriet Harman: I thank the hon. Lady, who is among the one in 10 to whom I referred, for making that point. Obviously, the issue of the housing market and house building is of concern. It was raised in questions to the Department for Communities and Local Government and in Treasury questions, and it was raised with the Prime Minister. We firmly believe that it is an issue on which the Government should act and that there should not be a laissez-faire attitude in the market. Public investment and public regulation of the mortgage markets have a role to play. I hope that the Conservatives will support us as we try to make progress on the issue.

Ian Cawsey: Last weekend, along with local ward councillors, I went to the Burton upon Stather village post office where I met Hilary Baker who runs the branch, and she presented us with yet more Post Office card account postcards, which all hon. Members will have seen plenty of. I asked for a statement on this issue at the last business questions before the summer recess and we are now some months down the line. I understand the point about not having a debate while the tendering is going on, but I do not mind being on the record as supporting the Post Office card account going to the Post Office, and I hope that we can have a statement next week that at least tells us when the contract will be awarded.

Harriet Harman: My hon. Friend the Minister for Employment Relations and Postal Affairs is present to hear that point, but I do not think that any of us are in any doubt about the importance of the post office network and the Post Office card account contract.

Jo Swinson: Will the Leader of the House be more specific about when we will hear from the Government on Equitable Life? She said autumn, but the temperature outside tells us that winter is not far away. Given that dozens of people in East Dunbartonshire and across the rest of the country have been waiting eight years for redress, and that the Government have had the ombudsman's report for four months, surely it is now time that we found out what action the Government intend to take to make redress to the many people who have suffered because of Equitable Life.

Harriet Harman: The parliamentary ombudsman took four years to construct her report and, as the hon. Lady said, the Government have been considering it for four months. It is an important issue and we will give our response shortly.

Phyllis Starkey: This week, Sense, the deafblind charity, lobbied Parliament and drew Members' attention to potential discrimination in the way in which the travel concessions are being applied, in particular, that some people with disabilities who are entitled to a free travel concession are unable to make use of it because their carer, who is necessary for them to get around, is not eligible for the concession. Will the Leader of the House consider ways in which this potential discrimination within the travel concession system can be debated in the House?

Harriet Harman: I will bring that important point to the attention of Ministers in the Department for Transport. It is one reason why, in the equality Bill that will be in the next Queen's Speech, we will be strengthening the duties and obligations on public authorities, including those involved with travel, to ensure that all public services are properly available to members of the public with disabilities.

Douglas Hogg: May we have a debate next week entitled "The Prime Minister's responsibility for the UK's recession"? That would enable us to point out, among other things, that his often-repeated boast that he had abolished boom and bust was not only economically illiterate and also untrue, it encouraged many people who should have known better to embark on excessive borrowing and lending, and to that extent he has personally aggravated the situation. It is quite wrong that a man whose judgment has proved so poor should now be in charge of policy making.

Harriet Harman: The right hon. and learned Gentleman has an opportunity to ask the Prime Minister himself at Prime Minister's questions every Wednesday when he answers on such issues to the House. It is thanks to his time in office as Chancellor that we have had investment in hospitals and schools. Would the right hon. and learned Gentleman like to say which hospitals in his constituency he would rather not have had the investment in? Would he like to say which schools in his constituency he would rather not have had the investment in? Would he like to decry the fact that there are more home owners in his constituency than there were when the Conservative party was in government? This is clearly an economic crisis whose origins are international, and we are fortunate to have a Prime Minister who has not only strengthened our economy but can help to sort out the world economic problems.

Rob Marris: I should like to associate myself with the remarks made earlier about having a longer parliamentary year so that we can have proper scrutiny on Report, with two days if necessary.
	May we have a debate on the functioning or non-functioning of the parliamentary ombudsman's office? It is reprehensible that it took her four years to produce a report on Equitable Life, and meanwhile pensioners are dying. I have a constituent, Mr. X, who was told by her office that it would take more than six months to make a preliminary decision as to whether his case would be investigated, although she rowed back on that after I complained. We either have an incompetent ombudsman or one who does not have sufficient resources, and the House should debate the matter sooner rather than later.

Harriet Harman: The parliamentary ombudsman is giving evidence to the Public Administration Committee this morning, and we will be able to see from the report of those proceedings whether the important points made by my hon. Friend were addressed by her.

George Young: Further to the right hon. and learned Lady's earlier reply, I hope that she will be supporting all those excellent women Conservative candidates who hope to unseat her male colleagues, which would improve the percentage that she criticised.
	Last year, the pre-Budget report was in the first half of October. This year it is even more important that the House and country know how much the Government plan to borrow, spend and tax, so will the right hon. and learned Lady now give us the date of the pre-Budget report?

Harriet Harman: I will announce the pre-Budget report in the usual way as part of the following and the subsequent weeks' business.
	It is important that we have women Members of Parliament who support women in the country, not women such as the shadow Leader of the House who, having been elected to Parliament, then voted against the national minimum wage, which was the most important measure for women's income.

Nick Ainger: My right hon. and learned Friend will be aware that many millions of households are very worried about high energy costs, particularly with winter coming. She will also be aware that the Prime Minister has called on the oil companies to pass on the falls in crude oil prices to their customers as quickly as possible. Many people in rural areas are dependent upon liquefied petroleum gas and domestic heating oil, which are linked directly to the price of crude oil. Yet my constituents have recently received a letter from a major supplier of LPG, Flogas, informing them that the price will not be going down but up. Moreover, one neighbour received a letter from Flogas saying that his price was going up 5p, but for his neighbour the increase was 3p. May we have a debate on competition and transparency in the LPG and heating oil market in rural areas as it is clearly needed urgently?

Harriet Harman: Those are matters of real concern. We need to maintain the supply of oil internationally and to ensure that it is competitive and well regulated. When there is a fall in the price of a barrel oil, we must ensure that it is passed on to the consumer. My hon. Friend raises an important issue, which I will raise with my Government colleagues and make sure that they write to him to tell him what action is being taken.

Julian Lewis: Earlier this year, the Leader of the House made a decisive intervention on the question of the confidentiality of Members' home addresses. Will she consider doing the same thing again in the light of the fact that the Ministry of Justice is considering whether in future candidates' addresses at general elections must be revealed when they nominate themselves and on various documents later? The guidance from the Information Commissioner in such situations is usually that the first part of the postcode is enough. Bearing in mind that the reason the judges made their dangerous decision early this year to allow home addresses to be revealed was the fact that they are revealed every four or five years in general elections, may we now consider closing this loophole?

Harriet Harman: This matter is under consideration by the Ministry of Justice and I know that it found the hon. Gentleman's suggestions extremely helpful. He takes a thoughtful approach to this. It is obviously in the public interest for the public to know when they come to vote in an election whether a candidate lives in their area or miles away, but whether the precise address, including the flat number in a block in a particular street, should be given is questionable. We need to ensure that the public have the information that they need and the MPs, candidates and their families have the privacy that they need. I am sure that hon. Members can work together to sort this out.

Albert Owen: The shorter daylight hours concentrate our minds still further on the energy challenges—electricity capacity, in particular—that we face as a country. May we have a debate on the need to extend the existing life of currently generating power stations, so that we can meet short-term and medium-term demand while new technologies and stations are being considered and developed?

Harriet Harman: In an extremely brief intervention, my hon. Friend has made a profound and important point, which relates to one of the reasons why we created the new Department of Energy and Climate Change and to one of the issues that it is addressing. I know that my hon. Friend will play an important part in the new Department's deliberations.

David Heath: May we have a debate on what I can only call bogus land banks? An internet site is offering 209 so-called building plots in my constituency for up to £18,000 a time in the village of Dean, which comprises about 30 houses. The plots are on agricultural land that will never, ever have planning permission for such development.
	I do not think that the offer is illegal at the moment, but it is undoubtedly a scam. May we have a debate on how we can better protect the potential purchasers, who often will not be in this country, but are expatriates hoping to come home and retire in a house in beautiful rural Somerset? They may find that they have actually bought a field.

Harriet Harman: If people are offering for sale as building development sites areas of land that are no such thing, that could be fraud. I suggest that the hon. Gentleman seeks a meeting with the Serious Fraud Office about whether criminality is involved. I shall bring the issue to the attention of the Department for Communities and Local Government.

Desmond Swayne: May we have a statement on how aspects of sharia law are being introduced pre-trial in some civil courts? Those are profound changes with enormous implications. Many of our constituents find it absolutely extraordinary that this is happening without any parliamentary scrutiny at all.

Harriet Harman: Sharia law is not being introduced into our civil courts or any other part of our justice system. If agreement in respect of sharia has been reached, there is sometimes provision for that to be endorsed by the courts. However, that is subject to the agreement not trespassing on the public policy principles of fairness. There is no question that any other legal principles will compromise our own justice principles. If the hon. Gentleman's constituents have been reading the newspapers or inadvertently listening to him, he can reassure them that they do not have as much to worry about as they thought.

John Bercow: As this is international brain tumour awareness week, may we have a debate as soon as possible on the issue of brain tumours, in Government time and on the Floor of the House? Given that brain tumours can attack anyone, that their causes are unknown, that screening is unrealistic, that prevention is impossible but that treatment is improving, will the Leader of the House accept that we need to debate the case for more research, more access to cutting-edge therapies, more clinical trials and more support for families at the earliest opportunity?

Harriet Harman: The hon. Gentleman might draw that issue to the attention of the Health Committee. I will ask my right hon. Friend the Secretary of State for Health to write to me about what is being done in all parts of the country to improve the treatment of brain tumours once they have been diagnosed. I shall ask him to send a copy of the letter to the hon. Gentleman as well.

Mark Hunter: This week, the Transport Committee published its report on road safety which has again confirmed the Government's lack of progress on tackling drunk drivers and on the problem of uninsured drivers. Will the Leader of the House find time for an urgent debate on those issues so that more lives are not needlessly lost?

Harriet Harman: I pay tribute to the Chair and all the members of the Transport Committee. Over the years, the Committee has played an exceptional role in taking forward and pressing issues of transport safety. Some call that evidence of the nanny state, but it is about saving lives. The Committee's important recent report will get full consideration from the Government.

Crispin Blunt: In the hands of the Government, the seasons can be a somewhat flexible concept. For the purposes of the right hon. and learned Lady's statement on Equitable Life, on what date does autumn end?

Harriet Harman: I have simply repeated to the House what the Chancellor has said. We all recognise that many people have been profoundly affected by the problems at Equitable Life. The issue is being investigated. The Government are considering that investigation, and will respond.

Evan Harris: In response to the remarks on assisted suicide made by the hon. Member for Walsall, North (Mr. Winnick), with whom I fully agree, the Leader of the House said that Back Benchers had the opportunity to raise controversial issues in Bills on Report, when the scope is wide enough for amendments to be selected. In respect of the Human Fertilisation and Embryology Bill, such issues were raised but the Government took what I understand to be the unprecedented step of whipping through a programme motion to deny a free vote on the controversial issue of abortion, in which Back Benchers on both sides were engaged. Two weeks ago, the right hon. and learned Lady intimated that that would be a normal procedure and no notice was given to those who tabled the amendments—many of them women with whom she has worked on equality issues for many years. For her sincerity to be recognised, will she give time to explain to the House how programme motions are normally used to decide the time given to controversial issues on free votes on Report?

Harriet Harman: When deciding on a programme motion, consideration is paid to how Government and Back-Bench amendments and new clauses can be given adequate time for debate on Report. That time follows the consideration that there would have been during pre-legislative scrutiny and in Committee. In the Human Fertilisation and Embryology Bill, exceptionally, there had been time on the Floor of the House for consideration of amendments. The normal procedure is for the programme motion to come before the House to be discussed.
	The hon. Gentleman and I agree that it is important that not only should there be proper sex education and proper availability of contraception, but that if a pregnancy has to be terminated, the facilities should be there for that to happen as early as possible. That is the position in all parts of the country. I suggest that he and I work together on what is a free-vote, not a Government-versus-Opposition, issue. Instead of attacking me, he should work with me to make progress for women all around this country.

Christopher Chope: On 17 October, the Government opposed my Bill to abolish the television tax, arguing that having the licence fee was the only way to protect the editorial freedom of the BBC. In the light of what the Prime Minister said this week, in what seemed a blatant attack on the independence of the BBC, may we have a fresh debate on the issue? In that way, we can get all the people together in this country and recognise that the licence fee is outdated and regressive and that it is a tax that should be abolished.

Harriet Harman: We have no plans to abolish the BBC and its important public financial support, which comes through the licence fee.

Lorely Burt: In parts of Birmingham, commercial property is being offered for as little as 50p a square foot. Other commercial properties are being needlessly demolished because their owners cannot afford to pay the empty property business rate. May we have a debate on Government policy to see whether it is possible to get some shift for those companies, which are in a bad state at the moment?

Harriet Harman: The hon. Lady makes a serious point. This subject was raised immediately preceding business questions in Treasury questions, when one of the Treasury Ministers said that they understood the concerns and were looking into them. I refer her to that earlier exchange in the House.

Philip Hollobone: Can we have a debate in Government time on changes to train timetables? Kettering rail users' group is rightly outraged. This week, signs have been put up at Kettering railway station promising major improvements to the train service from December, yet the number of trains north from Kettering is due to be halved, the evening peak time return service from London is going to be the worst that it has been for 25 years, and the Saturday service will be quite appalling.

Harriet Harman: I will bring the hon. Gentleman's comments to the attention of the Secretary of State for Transport. However, people in Kettering, as well as throughout the country, have benefited from more trains being on time, better quality rolling stock and more investment in the rail network. We certainly have further to go, but I hope that he recognises the progress that has been made on rail transportation for passengers, as well as freight, in Kettering and elsewhere in the country.

Points of Order

Douglas Hogg: On a point of order, Mr. Deputy Speaker. I am sorry to raise this, but I have had to do so before. The Chair is the guardian of Back Benchers in this House, and business questions is an exceptionally important opportunity for Back Benchers. I acknowledge the fact that, because it is a light House today, all the Back Benchers who wanted to get in got in, but it is also true that the Front Benchers between them took 20 minutes, and the Leader of the House is prolix in her answers. As a consequence, Back Benchers are often not called on these important occasions. Will you and Mr. Speaker see what can be done to address what is potentially a very great unfairness to Back Benchers?

Desmond Swayne: Further to that point of order, Mr. Deputy Speaker. Is not the proper answer to the question, "Can we have a debate?", either yes or no; we can or we cannot? If the Leader of the House were to do that rather than attempt to have the debate now, in which she always gets the last word, the business of the House would be more expeditiously dealt with?

Mr. Deputy Speaker: If I may deal with those two points of order in reverse order, my response to the hon. Member for New Forest, West (Mr. Swayne) is that how Ministers answer questions is certainly not a matter for the Chair, and I suspect that it is not a new problem either.
	With regard to the point of order raised by the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg), Mr. Speaker or any occupant of this Chair is very keen to allow as many Back Benchers to get in as possible, because this is very much a Back Benchers' occasion. Today, fortunately, we got in everybody who wanted to get in. I trust that the Front Benchers, who are both here, have heard his comments.

Anne Main: On a point of order, Mr. Deputy Speaker. When hon. Members ask when they may expect an answer to a question, it is less than helpful to be told that it will be autumn, particularly when we are also told, as we were in the Communities and Local Government Committee, that autumn is defined as December. It would be more helpful if the Leader of the House stuck to a rigid timetable instead of fobbing us off with vagaries about seasons.

Mr. Deputy Speaker: I am afraid that I have to repeat to the hon. Lady what I just said—the manner and the time in which Ministers answer questions is not a matter for the Chair. I suspect that the definition of autumn may vary a little, particularly considering the weather that we have had recently.

TOPICAL DEBATE

Businesses and the Regions

Patrick McFadden: I beg to move,
	That this House has considered the matter of businesses and the regions.
	It is right that we discuss how the current economic situation is affecting business in the great regions and cities of our country. In recent months, we have experienced what the International Monetary Fund has described as
	"the largest global financial shock since the Great Depression".
	Last week, the Governor of the Bank of England said:
	"Not since the beginning of the First World War has our banking system been so close to collapse."
	The crisis facing us is global, interconnected and unprecedented in recent times. The depth and global nature of the crisis means that it affects not only the City of London and the financial markets but the wider economy.
	A properly functioning banking system is the vital foundation stone for a thriving wider economy. When we do not have that, as we have not in recent months, businesses find it hard to gain access to finance, investment decisions become more difficult, and confidence declines.

Philip Hollobone: Kettering borough council is organising a credit crunch summit involving local businesses, residents, banks, building societies and housing associations. Will the Minister or one of his colleagues accept an invitation to attend or, if he or they cannot, will the regional Minister be able to support this initiative? Will the Minister take this opportunity to applaud Kettering borough council's efforts in this regard?

Patrick McFadden: I am sure that that will be carefully considered if the hon. Gentleman lets us know the date.
	Last week, my noble and right hon. Friend the Secretary of State set out some of the measures that the Government are taking to help businesses through these difficult times. We are taking those steps because we are aware of the critical importance of small and medium-sized businesses to our economy—the wealth that they create, the creativity that they offer, and the contribution to the quality of life that they make. The Government are taking steps as regards cash flow, with early payment of bills; and on access to finance, with the important discussions between the Government and the banks relating to the availability of credit. Indeed, today my right hon. Friends the Chancellor and the Secretary of State are meeting the heads of the main banks, the European Investment Bank and business representatives to drive forward take-up of ElB's loan facility for small and medium-sized enterprises. We also announced measures on access to training, advice and support, which are vital to businesses in these difficult times.

Mark Prisk: I welcome the re-announcement of the EIB money. However, as it originally occurred six weeks ago, why is that money yet to be received in any small firm's account, even though the French Government have already issued the first tranche?

Patrick McFadden: I can assure the House that the Chancellor and the Secretary of State are pressing ahead with this as quickly as possible in their discussions with the banks.
	Last night, in the Mais lecture, the Chancellor set out further steps in our approach to the situation, particularly with regard to public spending. He said:
	"When private activity slows, it is even more important to maintain wider public spending. This is why it is right to bring forward planned spending commitments—as with our housing package in September...We must also make sure we maintain public investment—in infrastructure, education and health".
	He also stressed that the Government will take the decisions necessary to ensure stability in the medium term to return borrowing and debt to a sustainable level.
	These statements matter for businesses in our regions because many businesses depend on the Government as a customer. Those businesses supply the goods and labour that are necessary for the building of schools, roads, and so on. They include companies such as Hill and Smith in my constituency, which I visited on Friday. It makes crash barriers for our roads, and the Highways Agency is one of its main customers. Such companies are very interested in the level of public spending that is to take place.

Mark Prisk: Statements are welcome, but money would be nicer, from small firms' point of view. Why have the French Government managed to get the money out and we have not?

Patrick McFadden: The hon. Gentleman says that money would be nicer. Perhaps he could take that up with his colleague, the hon. Member for Rutland and Melton (Alan Duncan), who last week, having posed the question, "Where should we be?" told the House that we should have "lower spending". There is quite a contrast between the position that the Chancellor set out last night and the position of the Conservative party.
	The steps that we have announced on support for businesses and on public spending are measures aimed at benefiting the whole country. We want to see businesses prosper and opportunities created in every part of the country. For that reason, we reject the notion advanced by a right-wing think-tank over the summer that we should give up on certain parts of the country and that if people wanted a better life they would simply have to move to get it.

Robert Smith: One of the announcements made last week concerned help for business through the way in which Her Majesty's Revenue and Customs dealt with the collection of taxes and with companies in difficulty. At the time of the announcement, the Treasury Minister was unable to say whether new guidance would be placed in the Library on how that help would be achieved. Have there been any developments on exactly what message we can give in our constituencies that are facing trouble about how HMRC will put into effect the headlines on taking a more sympathetic approach at a time of economic crisis?

Patrick McFadden: If my Treasury colleagues are ready to issue guidance, they will do so, but the statements from last week stand.
	As I said, we are not about to give up on the great cities, the smaller industrial or market towns or the rural parts of our country, as the report over the summer suggested that we might. We believe that action at national and international level is necessary to respond to the current problems, given the global nature of the crisis, but so too is action at regional and local level. One important lever in that process is the network of regional development agencies.

Simon Burns: On the regions, will the Minister acknowledge that there is a role for individual Ministers for each region to play in helping to encourage and foster good business conditions? If he accepts that proposition, could he explain why the Minister for the East of England, during the first 11 months of her tenure, never once stepped foot in the largest county in the east of England, Essex?

Patrick McFadden: I believe that all the Ministers of the regions are doing a good job in working with business, and I include the Minister for the East of England.
	It is now a decade since the Government created the regional development agencies, though I note that the Opposition voted against the Bill that created them. Those organisations, together with business, local authorities and other local partners, have played an important role in fostering economic development in their areas, be it the new media city in Salford, the North East Productivity Alliance aimed at lean manufacturing, or the east midlands redevelopment to create the UK's largest bioscience and innovation centre. Wherever we go, we can see value-added examples in which those organisations have been important partners.

Alison Seabeck: I thank my hon. Friend for giving way and for drawing attention to the role of the regional development agencies. He will be aware that marine skills and sciences are important to the south-west, particularly to Plymouth—there is a lot of international expertise. The RDA has been investing heavily in that area and supporting apprenticeships, which are important to small and medium-sized enterprises, of which there are many in the south-west, feeding into that industry. Will my hon. Friend give a commitment to ensuring that there is ongoing investment into RDAs to support apprenticeships in the south-west?

Patrick McFadden: As I said, we can find good examples in each region, and my hon. Friend highlights such an example in the south-west.

Anne Main: I ask the Minister again whether he has evaluated the impact of removing £300 million-worth of investment via the RDAs from small businesses. The hon. Member for Plymouth, Devonport (Alison Seabeck) may well have wanted some of that investment. It was a painful decision; has he evaluated it, and would he like to tell us what he thought about it?

Patrick McFadden: I have a couple of things to say to the hon. Lady, who has raised this point consistently during the past couple of weeks. First, it is not the case that that money has been removed from small business support. The RDAs will spend some £6 billion during the next three years. Some of that money is spending geared for 2010, which has been brought forward to spend on a housing package now which will make an impact in the regions. If she is worried about public spending, I suggest that she discuss the matter with the Members on her Front Bench. They said last week that we should have lower spending. Perhaps she might take up the matter with them.

David Kidney: I do not suggest for a moment that there is an equivalence of severity between today's global shortage of funding and credit, and the collapse of MG Rover in the west midlands in 2001, but does my hon. Friend agree that in the aftermath of that collapse, which was severe for the region, the regional development agency, Advantage West Midlands, responded positively with support for the supply chain so that we did not lose the number of jobs that people thought we would? Is that not a model for the benefit that RDAs across the country can bring?

Patrick McFadden: That is a good point. I highlighted some examples of ongoing regional development around the country. At times of crisis and economic shocks, RDAs have played an important role. For example, during last year's floods, RDAs were able to get short-term help to businesses quickly and effectively. The example that my hon. Friend gave is absolutely right. In the west midlands, following the collapse of MG Rover, the RDA played a critical role in supporting businesses in the supply chain and in co-ordinating the retraining of the more than 6,000 workers affected. The result, not just of the RDAs' efforts, but of all those concerned, was that by late 2006 fewer than 500 of the original 6,000-plus workers were still seeking alternative work.
	In the current circumstances, RDAs play an important role in working with businesses through their own initiatives, and they have already worked with businesses and local authorities to create a more user-friendly system of business support. In the past, too many of those schemes grew up, however well intended they were. Last week, my noble Friend the Secretary of State announced that they would be slimmed down to 30 advice, grant and loan products, which collectively will deliver some £1.4 billion in support to businesses. In individual regions, help is being provided to businesses in the current environment—for example, One NorthEast's efforts to match jobseekers with vacancies in the area or, in the south-east, the development agency's efforts to help businesses reduce the cost of their energy needs.
	Last week, when I said that the Opposition had placed a question mark over the future of the RDAs, the hon. Member for Rutland and Melton said it was not so, but I have checked the statements of Opposition Members on that issue. The Leader of the Opposition said, just a couple of months ago:
	"let's abolish things like the regional assemblies and the West Midlands Regional Development Agency."
	He went on to say:
	"I think the entire experiment with regional government, with regional assemblies, with many of the regional development agencies, I think that has been a complete waste and that should go."
	When asked about restructuring regional quangos, the Conservative local government spokesman, the hon. Member for Brentwood and Ongar (Mr. Pickles), said that:
	"you could only possibly say we were looking towards restructuring them if you felt that Ann Boleyn received a restructuring from the guillotine. So in that sense there is going to be a sort of divvying up of the corpse".
	It is quite clear that the Opposition have placed at least a question mark—and that is putting it politely—over the future of RDAs.

Mark Prisk: Let us be clear: no commitment has been made to do one thing or the other. We recognise that the regional governance of this country has become a muddle, which is why the assemblies are going. If the Minister is so keen to hear our policies, why is he not willing to wait? We have made it clear when we will make the final announcement. Good things come to those who wait.

Patrick McFadden: I do not think that the hon. Gentleman can gainsay the quotation of his own leader:
	"many of the regional development agencies, I think that has been a complete waste and that should go."
	It is impossible to deny that that is a threat to the RDAs. The quotes stand, and if the hon. Gentleman thinks that the policy is in doubt, perhaps he should talk to his party leader—perhaps he has not been told. We appear to be hearing one thing from the hon. Gentleman and another from his party leader and his local government spokesman.
	We will continue to help businesses through the current economic difficulties with national, regional and local action. Local authorities have an important role to play as a customer, as with national Government, and through the valuable economic focus that many have.
	Business taxation has been mentioned in our debate about the best way in which to help business. The rate of corporation tax and the small business rate are lower than those that we inherited. It is important for business to know that the Conservative party proposes to reduce reliefs on investment in plant and machinery as well as to abolish the £50,000 annual investment allowance. That would have a direct impact on precisely the sort of investment decisions that businesses need to make during the downturn. It has been fairly said that, in the wake of the financial crisis, perhaps the country should rely less on financial services and do more to support manufacturing. However, abolishing or reducing the reliefs would hit precisely the sort of investment that the country needs to boost manufacturing. Given the part of the country that I represent, I believe that manufacturing is important and valuable to our economy.
	There is no doubt that it is a difficult time for our businesses. We cannot insulate business or our country from the effects of a global downturn, prompted by a banking and financial crisis unprecedented in recent decades. However, we can say to businesses and their employees that we stand with them. Through the steps that we have taken internationally, nationally and regionally and locally, we will continue to stand with business to help it through. On the other side of the difficult economic period, we will work with business to ensure that the energy and creativity of British business, which is renowned throughout the world, can continue contributing to our country in future.

Mark Prisk: The debate comes, as the Minister suggested, at a time of great financial uncertainty. Businesses throughout the UK face falling demand, rising bills and—as was mentioned with regard to the banks—a squeeze on their finances. Throughout the country, businesses fear that the boom of the past 16 years is turning quickly to bust. The Prime Minister may be in denial, but many of our constituents do not have that option. They face potential redundancy, and the businesses that they have built up over many years face closure. That is why I believe that the Government should scrap their planned tax rises for small companies. What, for example, is the economic logic of increasing small company corporation tax by £370 million in this of all years? As business owners in Cornwall said to me recently, they need a tax rise like they need a hole in the head.
	We need further action. The Government should cut payroll taxes for the smallest employers to help them save money and thus keep jobs. Conservative Members want to help more small firms claim business rates relief. The Local Government Association reckons that, across England, only half the eligible firms benefit from the relief, despite its being worth up to £1,100 per annum. More needs to be done to help eligible firms claim that money, and I am pleased to say that my party is leading the way.
	May I bring to the Minister's attention the concern about Government contracts that was raised with me when I met businesses in Birmingham last month? As he said, we have some excellent high-value manufacturers and service firms in the midlands. Yet some of the newer small businesses told me that they feel excluded from doing business with the Government because of the red tape around state procurement. The Government are the biggest purchaser of goods and services, spending roughly £125 billion this year alone.
	What needs to change? First, the Government should scrap the rule that requires three years of audited accounts before firms can even be considered for bidding. Secondly, small firms in more remote locations need to be able to access contracts online more routinely than they can at the moment. Some contracts are online, but such a service is far from comprehensive. I have rural enterprises in east Hertfordshire, and their ability to keep track of Government contracts is limited, partly because of their location. Many Members will find that that applies to businesses in their constituencies if they are located away from major urban centres. To help them, all state contracts worth more than £10,000 should be published online as a matter of course, not on the current ad hoc basis.
	Thirdly, there should be a single pre-qualification questionnaire for Government contracts that are worth less than £50,000. If a firm pre-qualifies for one Department, what is the logic behind making it go back to the beginning and reapply to another Department, given that it was clearly eligible for one Department? Taken together, those reasonably small steps could make a big difference to many businesses in my constituency and, indeed, in every region.

David Kidney: I understand and agree with many of the hon. Gentleman's points. I am a great fan of the representative bodies, large and small, of business—the CBI, the British Chambers of Commerce, the Federation of Small Businesses. Does he agree that, with some co-operation from the public sector, those organisations would be great engines of support for the sort of the businesses that experience the difficulties that he described?

Mark Prisk: I regularly meet representatives of those organisations and others. The hon. Gentleman is right that it is important that they have a strong voice. However, many of them are extremely good at doing what he suggests and it is important that the Government work closely with them. Indeed, several of my points came directly from the FSB, the CBI and other organisations.
	Since the second world war, London has become a great world city. However, when we look at our international competitors, it becomes clear that some of our other cities have slipped behind. For example, Manchester, Birmingham and Newcastle, which are fantastic urban centres and have made great strides in recent years, have slipped behind their competitors in many major European countries, especially in GDP per head. That does not mean that we are a poor country, rather that we have become more divided between a Greater London metropolis and the rest. In the past 16 years of growth, the south-eastern economic powerhouse has moved further away from the rest of the UK.
	Ten years ago, the Government presented their plans for regional development agencies. Yet from the start, those agencies were set two contradictory agendas: one collaborative, the other competitive. On the one hand, they are meant to help national Government close the gap between them, but, on the other, they are meant to promote their own prosperity. The most obvious example of that contradiction is the way in which RDAs compete abroad for inward investment.
	If one travels abroad to the major centres of economic activity, one almost invariably finds different RDAs, with different offices, staff and budgets, each vying for the same inward investment. For example, in May, I went to Shanghai with nine other Members from different parties. There, we discovered that, in addition to the British consul and the team from UK Trade & Investment, there were four separate RDA teams, all bidding for the same projects. That makes absolutely no sense, and was completely bewildering to Chinese investors and businesses. I made representations to the Minister in May and June and I am told that some progress has been made. I hope that, following those representations, the nonsense has been resolved—perhaps he can tell us.

Patrick McFadden: The hon. Gentleman describes offices abroad organised by the RDAs as "nonsense". Will he say whether his colleague, the Mayor of London, intends to close all the London Development Agency's offices abroad, as he suggested during his election campaign?

Mark Prisk: If that is the best response that the Minister can make, we are scraping the barrel. The Mayor of London rightly has his own agenda and will do what he thinks is right. I am talking about the Minister and his responsibilities. When we made representations in the past two years, he and his predecessors failed to make changes. I asked in May and June whether business in Shanghai had changed. Will he confirm that?

Patrick McFadden: We believe that such offices work well with UKTI. Indeed, we recently commissioned a review into how they were working by the independent consultants Arthur D. Little. What I am interested in is whether, as well as hanging the guillotine over the RDAs, to use the phrase that the hon. Member for Brentwood and Ongar (Mr. Pickles) used, the hon. Gentleman is still committed to closing all the RDA offices abroad.

Mark Prisk: I have told the Minister what should be done. There should be one strong team working in all the key economic centres that pools our resources and uses the strengths in UK Government, so that when investors are thinking about coming to this country, they get a clear and consistent view. The current muddle causes conflict.

John Howell: Let me reiterate my hon. Friend's point. My experience as an exporter and as someone who has helped UKTI is that the RDAs' approach has fundamentally eroded any concept of UK plc. That approach has meant that this country cannot exercise the muscle that the countries that have maintained a country approach can. For me, that was illustrated by a businessman returning from a mission to China. He said that it had been a disaster, because the Chinese had failed to appreciate the difference between the east and west midlands.

Mark Prisk: I can reiterate that point. I had a peculiar discussion in which I had to try to explain why two separate representations were being made to the same business about why Coventry was better than Leicester. Wonderful as those cities are, to someone in Shanghai that competition is confusing. The result is that the business went to Germany in the end. The Minister might be happy with that competition between our cities, but it is not productive. I am keen to ensure that we have the most effective UK voice. I am happy for it to draw on the talents across the regions, but there must be a single operation and one powerful voice.

Patrick McFadden: rose—

Mark Prisk: If the Minister is going to promise that he will provide that voice and remove such competition, I shall be happy to give way.

Patrick McFadden: The regional offices should work with UKTI, but the hon. Gentleman is singularly failing to answer a simple policy question. Given the chance, would his party close the regional offices or keep them open?

Mark Prisk: We believe that UKTI must be the lead voice abroad. The Minister can draw from that exactly what I mean. If the RDAs wish to participate, that is fine. However, there should be no competing offices and no competing resources; rather, there should be one powerful voice abroad. I hope that that answers his point.
	My main concern is not only the confusion in the Government's policy of having competing bids abroad, but the fact that after nine years and £13 billion, the RDAs have failed to close the regional gap. Independent statistics show that, outside the greater south-east, England's regions grew faster in the seven years before the RDAs were introduced than in the seven years afterwards. Indeed, the rate of business creation in some of those regions is static. The result is that whereas the seven regions outside the greater south-east represented 64 per cent. of the nation's economic output in 1992, by 2006, the latest year for which we have statistics, that figure had dropped to 56 per cent.
	I am not saying that everything that has been done has been wrong or that every pound spent has been wasted. However, the fact remains that the economic divide, which logically lies at the heart of a regional economy policy, is worse today than when those agencies began their work.

Alistair Burt: My hon. Friend is being very generous with his time. He has illustrated that the RDAs have struggled to cope with the economic agenda that they have been given, but they have been given additional things to do, because of the failure of the regional assemblies and regional government, and have now been tossed the bone of new planning powers. Has my hon. Friend found any RDA that welcomes the new opportunity that it has been given?

Mark Prisk: My hon. Friend is prescient as always, because that is precisely my next point.
	The question is: what should the Government do now to help business in the regions? First—this relates to my hon. Friend's point—they should not dilute agencies that are meant to aid business by loading on to them functions that they neither want nor need. I have had a string of meetings with RDAs, all of which made it clear that they do not want the planning powers. I look forward to meeting an RDA that does want them, but none has contacted me yet. As the regional assemblies are collapsed, the idea of transferring planning powers to the RDAs makes no sense. That is why we propose instead that responsibility for the regional spatial strategies should return to the hands of local government—to people who are directly accountable to the communities that they serve.
	Secondly, the quality and accessibility of business support needs to be sharply improved. The Minister confirmed that the Government had announced a reduction in the number of business support schemes last week, but I am yet to be convinced that Ministers really understand how and why business support must be business led, not Whitehall driven.
	It is also clear, however, that we need to look ahead to see how we can strengthen the economies beyond the south-east. To do that we need to ensure that the future of economic development is closer to the real centres of economic activity. After all, the administrative boundaries of the regions rarely reflect local economies. Let us take my county of Hertfordshire as an example. Hertfordshire's economy faces south towards London, but we are lumped in with East Anglia. The M27 corridor along the south coast, for example, is a natural travel-to-work area, but the Government have split it into two regions. The future lies not in Whitehall-led policies, with artificial boundaries, but in enabling closer co-operation both between local authorities and between councils and businesses.
	After 16 years of continuous economic growth, business is facing the harsh prospect of declining demand and shrinking cash flow. It is vital for businesses, in whatever region they lie, that we focus on how we can help them to survive. That is why my party has set out positive ideas to help them to cut costs, keep jobs and ease cash flow. That is also why the Government should strip their procurement budget of needless red tape, to enable small businesses to compete for this valuable work. I hope that Ministers will consider carefully the suggestions that we have made in this debate. All tiers of government have a part to play in the coming months to help businesses survive. Like the rest of us in the public sector, the Government must not forget that it is not they who create wealth, but business. Business creates the wealth and jobs on which the rest of us rely. It is important that Government Members remember that.

David Kidney: It is a pleasure to follow the hon. Member for Hertford and Stortford (Mr. Prisk), who was unfortunately unable to attend the meeting last night in Committee Room 10, which was organised by the Industry and Parliament Trust. Parliamentarians had a good discussion with representatives, owners and managers of and professional advisers to small businesses throughout the country.
	The event was very useful and showed that the small business sector is in a healthy position, representing as it does 99 per cent. by number of the enterprises in this country—about half our enterprise employment and more than one third of the total earnings of the sector. People said last night that they felt they were entering this difficult time in a much better position than in 1990, when they were net borrowers. Now they are net depositors. Now they feel better managed and are more flexible and ready to respond to the situation.
	Partly as a result of last night, I want to dwell on two things. One is the big picture of British enterprise in a global economy. The other is the more immediate issue of access to funds, especially when credit and funding have all but dried up. I want to start with British business's global position by saying, "Let's hear it for the entrepreneurial spirit in this country. Let's hear it for the businesses and entrepreneurs who battle and who, with the right support, can carry the world with them, however global the markets in which they operate are."
	The people attending last night's event were up for the struggle ahead and for seeing our way through to calmer waters, when the current difficulties will be over. We ought to respect the position of people who are willing to put their all into making this country a great place to do business and a great success in world markets. As policymakers and those who make decisions that affect their world, what do we need to do to make them competitive in a global economy? For us, this means being globally competitive in the areas that affect businesses, including regulation, taxation levels and, in better times, access to funding. This country ought to be well placed in respect of those factors. The Hampton review set us on the road towards world-class, risk-based, proportionate regulation. I might offer a word of caution, however, in that, as a result of what has happened to the banks and financial institutions recently, the appetite for deregulation and light-touch regulation has changed. It will be a challenge for us, as law makers and rule makers, when we come out on the other side of the present crisis, to resist the calls for heavier regulation, and to stay true to the Hampton review agenda of risk-based, proportionate regulation. Of course, the definition of "proportionate" might be different after the experiences that we are all feeling so keenly and deeply at this time.
	I should like to make a further point about regulation, although it admittedly relates more to the time when we come out of the present difficulty than to the present circumstances. Since 1994, we in this place have tried three times to set up a legislative fast track for getting rid of regulations that we accept are more burdensome than beneficial to British businesses. The first two attempts were well intentioned, but resulted in hardly any noticeable change. Last year, we made a further attempt, and we now have a Regulatory Reform Committee. The challenge for us, and for the business representatives and businesses that I mentioned earlier, is to work out a programme for sweeping away the regulations that we agree are too burdensome and provide too little benefit. We need to make use of the system that we in this House and the other place have established for fast-tracking the removal of those regulations from our system.

Mark Prisk: The hon. Gentleman is right to say that red tape is a burden that particularly affects small businesses. Does he share my concern that, according to the Federation of Small Businesses, the cost of complying with the tax system is now estimated to be about £8,700 per firm? Should not that be looked at?

David Kidney: Yes. We receive great advice from many sources about simplifying the tax system, and we should listen closely to it. There are gains to be made in relation to the detail of complying with our tax systems and, yes, there is progress to be made on that.
	I should like to make a plea regarding our decisions on which regulations we no longer want. The most recent survey by the Forum of Private Business—which was recently reported to us, as legislators—asked its members to identify the most significant barriers to their businesses. The No. 1 barrier was health and safety regulation. Personally, I think there are great benefits to be derived from health and safety regulation for the safety of the businesses, their work forces and their consumers. Back in July, the Public Accounts Committee cited a telling statistic that should make this country proud of its health and safety record, which is the best in Europe: in 1974, 1,000 people died in their place of work in this country; in 2006, the figure was 250. We should not throw out with the bathwater the baby that is the reason why we have regulation in the first place. There are benefits, and we must not lose sight of them.
	A long-term, and perhaps rather techie, point from a legislator such as myself is that it is quite difficult for any business, but particularly small businesses these days, to follow the laws that Parliament has said they must abide by. We are constantly amending primary legislation, and passing secondary legislation that amends other secondary legislation. This is often difficult to follow. My solution would be to have very general primary legislation that permits things to be done through a secondary legislation system. A lot of the law that results from that should be codified. We should have up-to-date codes to which people can have access, so that they can find out everything they need to know about their subject. That is my long-term desire, and I hope we can achieve it one day.
	I want to say a bit more about our global competitiveness and the taxation system. We need to be globally competitive through the tax rates that we charge in this country, compared with others. It is important for us, as legislators and tax raisers, to raise our eyes beyond the borders of our own country and be aware of the changes taking place in other parts of the world, to ensure that we remain competitive to the people who make simple decisions to move their investments from one place to another in this globally competitive world.
	On the big subject of Britain in the global market, I would like to praise the workers and managers of JCB for their recent decision to work a four-day week to protect a larger number of the work force from redundancy. Perhaps some Opposition Members are not too keen on the involvement of trade unions in workplace negotiations, but I want to praise the GMB, in particular, for effectively brokering that deal and persuading the work force to vote for it.

Patrick McFadden: Does my hon. Friend think that a company such as JCB would be helped by the abolition of reliefs on investment in plant and machinery?

David Kidney: I am quite proud of some of the reliefs and allowances that we have introduced since 1997. Reliefs on capital expenditure on equipment, and research and development tax credits, are positive things that we should not lose. I understand why my hon. Friend makes that point.
	I should like to make a general point about JCB, which also applies to other employers. By making such a decision to keep together its skilled work force, the company is maximising its ability to respond when the upturn inevitably comes. It still has its skilled work force ready, rather than letting them go, which could result in their skills degrading or their getting other jobs and being unavailable to a world-class company such as JCB when the upturn comes. JCB is a creditable example of the British enterprise spirit, with its skilled work force and its trade union acting as a social partner in the workplace.
	I turn now to the issue of access to funding and credit. Inevitably, instead of being part of a general discussion, this is now the No. 1 issue for everyone, because of the problems that we are all facing. The top issue for businesses in my constituency is their cash flow. It has always been important, but it is now critical. At the top of the list of problems is late payment. Businesses strongly believe that it is up to other businesses, like them, to pay their bills on time. They are also worried about the stories emerging of big players—the larger companies—slowing down their payments to others in the supply chain in order to protect their own financial position. They want to hear us say that that is unacceptable, and that organisations large and small should pay their bills on time. I am certainly happy to send that message clearly.
	As a result of those problems, an old chestnut has re-emerged: the speed with which banks clear cheques and other payments into people's accounts. When people see countries such as Sweden clearing payments within 24 hours, they cannot understand why their bank is still telling them to wait for up to five days. Over the years that I have been an MP, I feel that we have been strung along by the banks. They have always said that, tomorrow, with the right technology, they will be able to whizz these payments into people's accounts. However, I am still hearing that that is not happening. This is something that the banks could quickly get on top of and do something about. Now that the Government are a shareholder in several of our banks, I hope that our representatives on their boards will raise that issue at meetings, so that the banks in which we have a say can start clearing cheques into people's accounts as quickly as they can. I should like to see the corporate giants of our economy, which pride themselves on their social responsibility, making a point of paying their bills quickly and on time, and doing so in a visible manner. That would set an example to others.
	The Government are also an important buyer of goods, services and major contracts. They therefore have many bills to pay. It is pleasing to hear them say that they are committing themselves to paying those bills as quickly as possible and, in any event, within 10 days. I want the Minister to say that we can have regular updates to show that that is happening. In good years, we have accounts from Departments about their performance, and it is fair to say that even with a target of 30 days, they have not always shone with 100 per cent. success in meeting that deadline. In such times, it is crucial that we, the scrutinisers of Government, have the necessary information.
	The Government are an important part of the public sector, but there is a big public sector beyond them, and it is important that we urge everyone to adopt the same responsible approach of paying bills as quickly as possible. One thing that we can do as individual Members of Parliament is to chase up the public sector organisations in our constituencies and urge them to pay their bills quickly. I have written to the health trusts, the primary care trust and so on in my constituency to urge them to pay their bills as quickly as possible.
	When there are such pressures on access to credit and funding, people are concerned about the apparent drying up of access to funds at banks and banks unilaterally changing conditions of trade with their business customers. People have told us about loans that they thought would be rolled over but will now not be, or of loans that will be rolled over but on higher interest rates. As legislators, we should look at the terms that banks are going to use to do business with small and medium-sized enterprises from now on. The investment that we have made in some banks from public funds means that we should have a say in their performance. At Question Time today, some of us asked the Chancellor and his team about the promise that the banks which have been recapitalised using public funds will keep their lending at 2007 levels. We need to understand what that means for businesses.
	I can understand issuing a caution about not wanting to repeat the mistakes of the past and have irresponsible lending—the idea that asking banks to hit a target could lead to pressure to make the same mistakes—but lending to businesses has nearly always been responsible in this country. There is no reason to think that there should be any falling off in levels of lending to companies as long as businesses and banks continue the relationship that they had.
	On a final point about access to funding, and one that is beyond the Government, we heard an exchange between the Front-Bench spokesmen about making money from the European Investment Bank accessible to businesses as quickly as possible. I join the hon. Member for Hertford and Stortford in urging that we act quickly on that. To reprise the point that I made to the Minister about Advantage West Midlands, there was a huge shock to manufacturing in the region when MG Rover collapsed in 2001. There was a great deal of worry about the supply chain, which was extensive throughout the region, and about huge job losses as a consequence. Advantage West Midlands responsibly stepped up to the plate and made transitional loans available for businesses that were trying to find work to replace what they had lost with the collapse of MG Rover. As a result of that scheme, there were far fewer job losses than any of us had feared would be the case. The scheme was wound up when it had done its job, but because of the current situation, its time has come again. In fact, I can think of an individual case in my constituency which would benefit now, today, from access to similar funding. I certainly urge the Minister to make moves to see whether such money could be made available in the west midlands and across the country.
	The public sector as a whole is a huge procurer of services and should not drop its guard when it offers contracts to businesses in this country. I recently chaired an inquiry that produced the report "Sustainable Procurement". Despite its title, it is not a green document, but is about the sustainability—economical, environmental and social—of the procurement power of the public sector. I recommend it to the Minister. It includes pointers that would help British businesses to secure British contracts.
	There is such pressure on businesses that, inevitably, they will look at their skills training budget and ask whether it should be cut in these times of difficulty. That would be a dangerous thing to do and I urge them not to cut back on training now, because in the longer term, when the upturn comes and we need the skills of a better trained work force, they will miss not having made that investment. I hope that they will see the sense in maintaining their skills investment.

John Thurso: It is always a pleasure to follow the hon. Member for Stafford (Mr. Kidney) who, as usual, spoke with great common sense. I am tempted to follow him down the route of discussing health and safety regulation, because it is important, but I do not think that the time allowed permits me to do so. I shall therefore follow the major thrust of the end of his speech on the availability of finance, which is the critical issue for all businesses throughout all the regions and nations of the United Kingdom.
	First, however, I want to comment on the discussion about inward investment and the regional development agencies, and point to the nations as opposed to the regions. Scotland has one body responsible for inward investment, and it operates reasonably well. However, those of us in the more outlying areas find it useful to have our own personnel to go abroad and win business. Thurso is not, perhaps, the first port of call for a Japanese battery manufacturer, but we were successful in winning that business, and an important part of our local business it is. Perhaps that is a lesson for the RDAs.
	I have no doubt that when the figures are published early next year, we will find that we are currently in recession. The only questions are how savage it will be and how long. As in any recession, the core question that every business is asking is how to maintain its cash flow and how to survive. In past recessions, frankly, if we are honest, the policy levers available for helping businesses at any level were, to an extent, curtailed, because what was really needed was to get the economy going again. However, one lever is available in this recession that has not been available before. Owing to the financial crisis and the fact that the Government are now owners of some banks and substantial shareholders in others, they have an ability to affect the outcome of how those banks deal with businesses.
	We have heard in debates on business over the past week of banks increasing interest rates, increasing fees and curtailing facilities. I have recently had some concrete examples of where loan-to-value covenants have been breached. The bank has called in the facility on the basis of that breach, there has been a requirement to charge more interest, which in turn has breached the interest covenant, and the company is threatened with going into receivership, notwithstanding the fact that it is fully profitable and can carry on. Obviously, I could give details of the company involved, but the point is that sound companies are threatened with being put into administration.
	Today, I understand that the Chancellor of the Exchequer and Lord Mandelson, the Secretary of State for Business, Enterprise and Regulatory Reform, are meeting the chiefs of the banks. I again ask the Government to consider having a proper and spelt-out memorandum of understanding, clearly stating not the detail of one particular loan, but how in principle the banks are going to deal with companies. I suggest that that simple memorandum of understanding would cover several things. The first is the ability of banks to withdraw overdraft facilities on demand. They should agree to a 28-day period from notification to when they would put it into effect. The second concerns covenants on capital values and interest to cover the point that I have just made. The third is to agree not to increase the current interest margins and fee charges that sound companies are paying. Another is to cover the point that the Chancellor made in an article that I read this morning, which says that he
	"has promised to step in if banks were found to be 'recklessly withholding money'".
	Clearly there must be a way that the problem can be dealt with before the company has gone under, and that needs to be spelt out as well.
	I suggest to the Minister that one of the main things that we need is clarification from the Chancellor and Lord Mandelson about precisely what is meant. At present there is merely an open aspiration that credit will be available at 2007 levels, and until clear principles are established demonstrating what that means to businesses, it will not be a great deal of help to them. While I accept that summits, forums and meetings are of some use to businesses, what is really required from the Government at this time is leadership and clear direction, and that means setting out the principles on which the banks will operate over the next two years.

Anne Main: I agree with some of what has just been said by the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso). I recently asked my local chamber of commerce what challenges faced businesses in St. Albans. It listed a wide range of problems, but most of them involved cash flow. Banks in my constituency are aware of the problems facing businesses, but there is a domino effect: when Peter does not pay Paul, no one can pay anyone. That is a big problem, and it will become no easier as time goes by. If other Members have not asked their local chambers of commerce the same question, I can tell them that there is a lot of hurt out there, and people in my constituency are certainly letting me know about it.
	I listened with interest to the Minister's praise for regional development agencies, but let me redress the balance somewhat by drawing attention to the concerns that exist. It is true that the RDAs' statutory purposes are, among other things, to
	"further economic development and regeneration"
	and
	"to promote business efficiency, investment and competitiveness".
	However, in evidence given to the Select Committee on Business and Enterprise in October, the Institute of Directors expressed the rather different view that
	"with the exception of the Regional Economic Strategy, this work"
	—the work done by the RDAs—
	"could have been done just as well by a properly staffed Government Office. From the viewpoint of business in the broader sense of the word, the benefit of the RDAs has been their business focus. Unfortunately as the years have gone by, that focus has diminished in the Region".
	That strikes me as quite a worrying comment.
	The RDAs have proved somewhat controversial and somewhat political, and the criticism has often been made that they are spreading themselves far too thinly without making a concentrated effort to tackle underlying problems. Let me say to the Minister again—and I will continue to say it—that the fact that funds that were to be directed towards business via the RDAs have been pinched to prop up the housing market is yet another problem. There will now be even less money for the RDAs to divert to small businesses, especially in my area, which makes me question whether there is any point to RDAs in general.
	The RDAs have also been accused of being too political, not just by the Conservatives but by business representatives. In its evidence to the Select Committee, the Institute of Directors also said that Government were
	"making the roles of the RDAs less business orientated, and more overtly political".
	There are concerns about the operation of the RDAs and about their ever-escalating budget, which has increased steadily since their creation. It stood at £2.44 billion in 2008, but that amount was not divided equally among the regions. Although the east of England is seen as a cash cow by the Government, my area received only £159 million worth of the pie.
	It could be asked why the Government have chosen to put the money where they are putting it. There are more small business start-ups in the east of England than anywhere else, and we are seen to be giving a huge amount to the Chancellor, which he redistributes to—I would say—his friends elsewhere; yet we receive very small amounts of the budget. That too causes me to question the role of the RDAs. The position seems bizarre to me, and, as I have said, I keep asking the same question.
	I have been told that the decision to take money from the east of England was painful and reluctant, but I do not think that the Minister has addressed it at all. We receive less than any other region, but £300 million has been taken from the RDAs' budget, and some of that is coming from the east of England. If the decision was indeed painful and reluctant, and if it was made in the knowledge that it would be an issue, may I ask what evaluation was made of the impact on businesses? I should really like an answer to that. It is particularly worrying that we are still feeding the delivery system although our budget has been taken away.
	As I said at the outset, businesses in my constituency are hurting. There are huge worries about the economy, and about how the area will fare. We are seen as being wealthy in St. Albans. While I dispute that—there are multiple poverty indices in parts of the area—it must also be said that we are not doing too badly. However, a recent survey by Oxford Economics, the commercial wing of Oxford university, placed St. Albans 16th out of 408 areas in the United Kingdom in terms of how badly it would fare as a result of the possible impact of the credit crunch. If the fact that we are the 16th most vulnerable area in the UK does not worry the Minister and other Government officials who tell us that we are wealthy, it ought to.
	We may be wealthy according to certain indicators, but we are also vulnerable when things start going wrong. Our area is very exposed, and particularly vulnerable in an economic downturn. The average credit card debt among St. Albans residents is £1,871, which makes us, in terms of credit cards, the fourth most indebted area in the country as well as the 16th most vulnerable to a credit crunch.
	I believe that we need a better form of delivery, enabling investment to go directly to the people who need it most. I was amazed to learn that—as my hon. Friend the Member for Hertford and Stortford (Mr. Prisk) mentioned earlier—the RDAs have cost the taxpayer £13 billion: £600 for every household. We must ask ourselves whether this is the best way of delivering money, not only to small businesses but to local people who are struggling economically. I would happily scrap these bloated quangos. I do not believe that we need a regional solution to local problems. That is not to say that there is no role for regions, but all too often we look to people in a distant place to deliver local solutions, and the businesses in my area feel that they do not always get it right.
	If we are going to spend so much money on a delivery body, let us make sure that we do get it right. If we believe that this is the right way in which to do things, let us not rob the pot when it is convenient. Surely the money that has been spent in this way could be better spent on reducing small businesses' national insurance contributions, cutting small-company corporation tax, and tackling all the red tape and bureaucracy to which other Members have referred and which is tying my small businesses in knots.

Charles Walker: By a process of elimination, I note that it is now my turn to speak.
	I feel that the issue of small businesses warrants more than a topical debate lasting an hour and a half, and I do not think that it says a great deal for topical debates that this great amphitheatre of our democracy is so sparsely attended. I hope that the House will consider the future of topical debates, which are about as relevant to this place as a peanut is to a dinner party. They add so little to parliamentary life that the experiment has probably run its course. However, I have listened with great interest to the contributions of Members on both sides of the House. I particularly enjoyed those of my hon. Friend the Member for St. Albans (Anne Main) and the hon. Member for Stafford (Mr. Kidney). Both made very thoughtful speeches.
	Let me say gently to the Minister that, while we all accept that the credit crunch is a global problem, we must also accept that the problem with small businesses is that banks in this country are simply not lending them money; or, if they are lending them money, they are raising the interest rates at which the money is to be paid back. I have made that point twice before in the House, and I think that if it is worth making twice, it is probably worth making a third time.
	All Members are probably aware that when interest rate periods end, banks are going back to their clients, the small businesses, and renegotiating the rates upwards, often to a significant extent—from, perhaps, 6 or 7 per cent. to 15 per cent. or more. That is putting huge stress on small businesses.
	It would be churlish not to welcome the fact that the Chancellor is sitting down with the banks today to try to get them to ease their lending terms. But I am concerned that this is the third or fourth such meeting he has had with the banks, who do not seem to be taking seriously his treaties on the matter. This should be the banks' last chance. If they do not improve their lending terms to small businesses after today's meetings, next week the Chancellor should be a little more forceful with them. After all, their balance sheets are being shored up by taxpayers, many of whom own small businesses.
	Small businesses encounter problems when creating jobs. A sole trader in my constituency makes a very good living helping people to create more storage space in their homes. As can be imagined, he is quite busy at the moment with people choosing not to move house and to do a conversion or to make use of the space they have instead. He told me that he would very much like to take on another person to work with him but he is put off by the increase in paperwork and the regulatory burden that that would create for him. That is a great sadness.
	We talk about corporate social responsibility within small businesses; there is nothing more responsible than allowing small businesses to create employment opportunities. Most employment opportunities I believe—I could be wrong; if so, I am sorry for misleading the House—are still created by businesses employing fewer than 10 people. I would be truly grateful if the Government went away and thought about how they could help the very smallest businesses to create additional jobs.

Mark Prisk: It might help my hon. Friend and, indeed, the House if I said that it is my understanding that, over the past 10 years, the proportion of small businesses that employ people has fallen; now, seven out of 10 small businesses employ absolutely no one.

Charles Walker: If those figures are correct—I have no reason to believe that they are not—that is a great sadness. This House recognises that small businesses should be the engine room of the economy. If we have a healthy small business sector, we have a healthy, growing and expanding economy.
	I conclude by making a plea to the Bank of England. If anyone at the Bank is watching proceedings here today, will they please take on board that small businesses need their interest rates reduced? We need to get interest rates down and to reduce the costs of borrowing and of capital. We need to give small businesses a fighting chance to have a prosperous future.

Patrick McFadden: I will not detain the House for long, but I wish to make a few concluding points. I thank all hon. Members for taking part in the debate on what we all agree is an important issue. It is the second time in two weeks that the House has discussed it and I agree with the hon. Member for Broxbourne (Mr. Walker) about its importance.
	The hon. Member for Hertford and Stortford (Mr. Prisk) spoke about small businesses and public sector procurement. It is not the case that businesses need to show three years of full accounts to bid for public sector contracts. How to enable more small businesses to bid for those contracts is a legitimate issue to consider, and the Glover review, which we commissioned to look into that, should report next month.
	The House will have noted the evasive responses of the hon. Member for Hertford and Stortford when asked three times whether his party would keep or close the regional development agency offices overseas. Perhaps I can enlighten him with a quote from the hon. Member for Rutland and Melton (Alan Duncan) who said:
	"We will end the practice of agencies establishing overseas offices."
	If the hon. Gentleman was unenlightened about his party leader's position on RDAs, he is now enlightened about the position on overseas offices.
	My hon. Friend the Member for Stafford (Mr. Kidney) quite rightly praised good companies such as JCB which do an excellent job in this country and abroad. He also raised important issues to do with cash flow and credit—matters of significant concern for businesses at the moment.

Mark Prisk: On credit, will the Minister answer the question that was put earlier? Why is it that in France the first tranche of money has already been given to small firms but, in this country, the Government are still dealing with the paperwork?

Patrick McFadden: As I said to the hon. Gentleman earlier, this very day the Chancellor and my noble Friend the Secretary of State are meeting the European Investment Bank and other banks to progress this matter, and I assure him that it will be done with all due speed.
	The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) spoke about the value of having representation abroad for a rural area such as his and also raised the important issue of access to finance. As the Chancellor said at Treasury questions earlier, this point is taken extremely seriously by the Government.
	The hon. Member for St. Albans (Anne Main) agreed with her party leader that the RDAs should be scrapped. My only point with regard to the benefits and costs to the east of England of various expenditures is that the east of England, too, will benefit from increased expenditure on housing. I suspect that housing is an issue in the east of England and the £1 billion package announced last month will bring benefit to the area.
	On small businesses and employment, raised by the hon. Member for Broxbourne, not only are there significantly more small businesses in the country than there were a decade ago, but they employ 1.5 million more people than they did a decade ago. We have more small businesses and we have more employment in those businesses thanks to the stable economy and growth that we have enjoyed.
	In conclusion, we will keep working with both banks and businesses to see the economy through the coming months.
	 Question put and agreed to.
	 Resolved,
	That this House has considered the matter of businesses and the regions.

Defence Policy

John Hutton: I beg to move,
	That this House has considered the matter of defence policy.
	It is a great privilege for me to be able to open today's debate on defence policy, and I am very much looking forward to the contributions of all right hon. and hon. Members. There is a depth of experience in this Chamber on which I would like to be able to draw in the weeks and months ahead. We all know that our country and its armed forces face real and obvious dangers. I hope that we can all work together to help to overcome them and to show our support for and pride in the men and women who serve our country so well.
	May I also begin by paying tribute to my immediate predecessor? My right hon. Friend the Member for Kilmarnock and Loudoun (Des Browne) was a distinguished Secretary of State. In my first week as Defence Secretary, I attended a meeting of NATO Defence Ministers in Budapest. I can pass on to my right hon. Friend that, as I was being introduced to colleagues from different member states, every one of my counterparts spoke of him with genuine warmth and respect, and rightly so. Those comments are a testament to his integrity, dignity and intellect, and I should like to pay my own personal tribute to the leadership that he gave to the MOD over recent years.
	At the outset of my first defence debate, I would like to remember the men and women who have been killed or injured serving their country. My thoughts and prayers are with their families, friends and colleagues. The individual sacrifices of this generation stand comparison with those of any other in our nation's history. We must never allow their service and sacrifice to be forgotten, because we owe them so much.
	I welcome this debate on defence policy. The primary purpose of our defence policy is to protect and enhance the security of our people. That is why we currently have 8,000 troops serving in Afghanistan and more than 4,000 troops in southern Iraq. It is also why we are investing more than £6 billion this year in new capabilities to serve the needs of our armed forces now and in the future.
	The nature of conflict changed throughout the 20th century. Thankfully, large-scale inter-state warfare is today less likely than it has been for some considerable time. Although we must always have the capability to defend ourselves, if necessary by ourselves, today our security will more often than not be aligned with that of our allies.
	Over the past few years, Her Majesty's Government have set out the modern nature of the global context in which we now operate. In the strategic defence review of 1998 and its new chapter in 2002, and more recently in the national security strategy, we have sought to identify the nature of the modern threats we now face: terrorism, failing states, weapons proliferation and energy insecurity. The UK's defence policies contribute towards three overarching strategic objectives: to achieve success on operations; to be ready to respond to tasks that might arise; and to build for the future. I would like to say a few words about each of these objectives.

Bernard Jenkin: The SDR set out a number of key long-term capabilities that the Government were to acquire over a period. The Secretary of State has now said that one of the big projects will be cut. Which is it?

John Hutton: No, I have not said that; I want to make that clear to the hon. Gentleman and the House. The SDR continues to inform our thinking; our future procurement strategies are designed around the analysis contained in it. An equipment examination is under way—as the hon. Gentleman, who is a distinguished Member of this House and of the Defence Committee, will know—but we have not made any decision not to proceed with any major procurement. I am grateful to the hon. Gentleman for giving me the opportunity to make that clear.
	Let me say a few words about each of the three important areas of interest. Our first objective—to achieve success on current military operations—is the most critical responsibility that my Department has to discharge. I have recently returned from visiting Afghanistan and Iraq. Along with many Members, I witnessed the professionalism and courage of our armed forces as they undertook their missions in what are challenging and very tough conditions. Like everyone else who has visited those theatres, I have returned impressed by the strength and common purpose of the UK's military-civilian effort in both Iraq and Afghanistan, and particularly in Helmand. It is testament to the widespread belief that sustained progress in Afghanistan will depend on security and governance combined—as, in fact, is the case in every modern conflict. I am glad to be able to report to the House that morale among our troops is strong and high. There is a deep sense of duty and commitment to the mission.
	I am also clear about the primary purpose of that mission: protecting the British people here at home. The passage of time and the complexity of modern counter-insurgency campaigns can sometimes combine to obscure the simple and unambiguous reason for our intervention in Afghanistan. Those who question the mission in Afghanistan need to be clear about the alternatives. This is not a discretionary campaign. The return of the Taliban and al-Qaeda to power in Afghanistan to re-create a safe haven for international terrorism would constitute a disaster for the international community, and it would represent a clear and present danger to the security of the UK. For those reasons, we cannot allow that to happen.

Harry Cohen: I hear what the Secretary of State says, but that was not the point made by British commander Brigadier Mark Carleton-Smith, who said:
	"We're not going to win this war"
	and that if the Taliban were prepared to
	"talk about a political settlement",
	that would be
	"precisely the sort of progress that concludes insurgencies like this".
	Should we not be going down the route of trying to get a political settlement, even if that brings the Taliban into some form of Administration?

John Hutton: Brigadier Carleton-Smith is a very fine officer, and 16 Air Assault Brigade did a fantastic job of work in Afghanistan. However, my hon. Friend has taken those words out of context. The brigadier was saying that we will not win the campaign in Afghanistan by military means alone, and I agree very strongly with him. There will have to be progress on the political side at some point—no one disputes that—and the sooner the better. We should be clear that if people are prepared to renounce violence, support the democratic process and ensure peace and stability in Afghanistan, we would not have any problem with such a political process being kicked off, but it is totally unacceptable for there to be in any sense a political reconciliation—to borrow my hon. Friend's words, I think—with the Taliban, who are an armed insurgency with a poisonous hatred of the west and of the decent values for which we and our allies stand. That would not be a political reconciliation; that would be a surrender, and that is not going to happen. Therefore, we must be clear about the military purpose, and we should not become confused over the semantics.

Tobias Ellwood: I hope that the Secretary of State does not confuse Opposition Members' commitment to the mission with our right to question the strategy, which we very much do question. I am grateful that the Secretary of State is present, but I am concerned that, while today's proceedings will focus on Afghanistan, neither the Secretary of State for International Development nor the Secretary of State for Foreign and Commonwealth Affairs will be present. Hugh Powell, who is in charge of the provincial reconstruction team, answers to the Foreign and Commonwealth Office and the counter-narcotics operation is also FCO. Reconstruction and development is all to do with DFID, yet the Secretary of State for International Development will not be present to answer questions on that. We are firing 10,000 rounds of ammunition every single day, and we need to have more scrutiny over Afghanistan than is currently the case.

John Hutton: I do not question the hon. Gentleman's motives; he is entitled to his opinions and to express them freely and fairly in this House without any let or hindrance, and he does that—and good luck to him. However, it is one thing to be long on the analysis of the problems, but we in this place must also be clear about the solutions. Those who are suggesting that the mission is doomed to failure and should be curtailed or ended, and that our guys should come home— [Interruption.] Well, I respect the hon. Gentleman for not saying that, but those who do say it have to be able to deal with one other question, which is important as it affects security here in the UK: would they be happy with the return of the Taliban and al-Qaeda and the safe havens that would be generated?  [Interruption.] I understand that that is not the hon. Gentleman's point, but there are many who do put that point.
	The hon. Gentleman is entitled to question the mission and to question Ministers; that is fair and proper and it is what we gather here to do. In answer to his questions about the Secretaries of State for International Development and for Foreign and Commonwealth Affairs, let me point out that this is a defence policy debate. The strategy in Afghanistan is a combined political and military strategy. There are plenty of opportunities in this place—the hon. Gentleman will know all about them—to question both those Secretaries of State about all such matters. I suspect that if both of them were present we would all make rather long speeches, and that the hon. Gentleman would probably not be called to contribute today—and we would all be the poorer for that.
	To turn to a point that I suspect addresses the concern of my hon. Friend the Member for Leyton and Wanstead (Harry Cohen), I acknowledge that in its form and length the conflict in Afghanistan is different from many in which we have been engaged during the past century. Progress will be measured; it will be incremental, and it will take time. We will need patience, which is difficult in an era that often demands instant solutions. I understand the responsibility on me to continue to make it clear to the House and the British people why we are asking the men and women of our armed forces potentially to pay the ultimate price. I believe, very simply, that it is to protect our freedom, our values and our security as a nation.
	Clearly, 2008 has been a difficult year for coalition forces in Afghanistan. We have lost 35 brave men and women in the service of this country, and there remain issues of real concern, such as the increasingly porous nature of the border with Pakistan, the fragile nature of governance in parts of Afghanistan, and the corrosive effect of the drugs trade on civil society.
	As with most things in life, however, sweeping generalisations often fail the test of serious scrutiny. So it is in the case of Afghanistan, where there is real and tangible evidence of progress. With the support of our troops, the Afghan national army is becoming a force capable of independent counter-insurgency operations, as those in Lashkar Gah recently demonstrated well. The ambition to increase ANA force capacity from 60,000 to 122,000 over the next few years is the right strategy for coalition forces and the Afghan Government. We will give our full support to the ANA's increasing role and capability.
	In 2009, there will be provincial and national elections in Afghanistan. We know that the insurgents will do everything that they can to disrupt the democratic process, because they are opposed to it, but the simple principle of the democratic ideal is universal: that every man and woman in Afghanistan should have the chance to choose their Government, free from violence and intimidation. Of course, it is for the Afghans to decide how they want their country to develop, and it may take many forms, but I would argue consistently for that strong, clear, simple, universal principle.
	Effective security and governance are linked by the third challenge in Afghanistan, which is tackling corruption. Narcotics remain the poison that permeates Afghanistan's political and economic system as well as its people. There has been some progress, and 2008 has seen a fall in opium production. Following the recent NATO summit in Budapest, I am confident that the international security assistance force in Afghanistan can make greater progress still in targeting the opium factories and narco-traffickers to cut the primary source of funding for the insurgency. I accept that there is more to do, and that the Afghan forces themselves must increasingly take responsibility.
	There has also been real and tangible progress in Iraq towards the creation of a secure and stable democracy in the middle east. Security has improved across every part of Iraq, with the level of violent incidents down to what it was in 2004. Increasingly, the 600,000 Iraqi security forces are taking the lead, with coalition forces able to concentrate on support, training and mentoring roles. That is as it should be. When I visited Iraq last week I was enormously encouraged by what I saw. The security situation in Basra, particularly, has significantly improved, and with our continued support the Iraqi security forces have freedom of movement right across the city.
	We are on track to complete our training mission with the 14th division of the Iraqi army in the first months of next year, in line with the Prime Minister's announcement of 22 July. Once we have completed our key tasks in the south, we expect a fundamental change of military mission in Iraq in the early months of next year. I discussed the matter with Prime Minister Maliki and Defence Minister Abd al-Qadir, who both want an enduring, broad-based bilateral defence relationship with the UK, in which our military role in Iraq is focused on training and education. That is what we want, too. We are working on the details of that, including a status of forces agreement, to provide the legal basis that will underpin our troops' presence in Iraq beyond the end of the year. I should like to put on record my appreciation for what our troops have done and are continuing to do in Iraq. When they return, they can come home with pride and satisfaction in the job that they have done.
	I wish to touch briefly on the two other objectives of UK defence policy: readiness for new operations and building future capacity and capability.

Harry Cohen: I am extremely grateful to my right hon. Friend for being so generous in giving way a second time. I shall try not to disturb him too many times. Before he finishes talking about Iraq, may I draw his attention to Amnesty International's report of this summer, "Iraq: Rhetoric and Reality—the Iraqi refugee crisis"? It stated that the number of Iraqis who had fled their homes had reached 4.7 million. According to Amnesty, it exposed how
	"the international community is evading its responsibility towards refugees from Iraq by promoting a false picture of the security situation when the country is neither safe nor suitable for return."
	I know that the Secretary of State has been there recently. Does he agree with Amnesty's assessment?

John Hutton: I agree that there is a serious problem about refugees. It is good to know that some of them are now returning to Iraq, but I would not accept that what I have said today in any way gives a false impression of the security situation in Iraq. We all know that the conflict has been horrendously difficult, but we must not let that experience cloud our assessment of the current situation. We should not deny that al-Qaeda remains a threat in parts of Iraq, but there has been a transformation in the security situation in the past 12 months. We should acknowledge and build on that. With great respect to my hon. Friend, it will not do any good to the cause that I hope we serve together to suggest that anything other than progress is being made in Iraq.
	The national security strategy was intended to set out the threats that we face as a country, ranging from terrorism and weapons proliferation to climate change and energy security. Of course, they are not fixed in one location or region, nor are they easily predicted, but what we can say with certainty is that the UK must develop capabilities to meet the wide range of potential threats that now exist. In the first instance, that means recruiting and retaining the right people and ensuring that our armed forces get the support and recognition that they deserve both during their time of service and after they leave the services.
	I hope that Members are already well aware of the personnel Command Paper, which was discussed during the debate on defence in the UK earlier this month. It was based on the key principle that those who serve our country must not be disadvantaged by what they do and that, where appropriate, they should receive special treatment in recognition of the service they have rendered. From rewarding six years of service with college or university education, free of tuition fees, to upgrading service accommodation, the Command Paper contains more than 40 specific commitments that are designed to remove disadvantage and improve service life. It is a mark of the respect that a nation should have for those who have served our country and risked their lives for its security. That respect was why the Government were able to respond with enthusiasm yesterday to the recommendations of the Under-Secretary of State for Defence, my hon. Friend the Member for Grantham and Stamford (Mr. Davies), to enhance yet further the national recognition that we give to our armed forces.
	Force readiness is another important indicator of the preparedness of our forces to respond to new threats. I recognise that that is a long-standing concern for the House, particularly given the current tempo of operational commitments in Afghanistan and Iraq. However, I hope that all Members would agree that the armed forces' overriding priority must be the success of current operations. As we all know, in every year since 2002, they have operated above the overall level of concurrent operations that they are resourced and structured to sustain over time. However, they have consistently and reliably provided substantial forces at immediate readiness for current operations. The armed forces are stretched, but the chiefs of staff advise me and my ministerial colleagues that, at present, the situation is manageable.
	The current commitments will have an impact on our ability to meet force readiness targets for the full range of potential contingent operations provided for in our planning assumptions. None the less, I am concerned to improve force readiness. As I have made clear, subject to conditions on the ground and the advice of our military commanders, we will be in a position to reduce substantially our commitments in Iraq over the course of next year, which will help to relieve the burden on key strategic assets. Following a detailed review of the security situation in Kosovo, and of wider military commitments, we have agreed that the UK contribution to the Balkan operational reserve force should cease at the end of this year. That, too, will help.
	Force readiness is also about our ability to respond to demands for new equipment on the front line. To date, more than £3.6 billion from the Treasury reserve has been approved for urgent operational requirements. That money is for new protected vehicles, new body armour, better communications and improved defensive systems.

Angus Robertson: I thank the Secretary of State for allowing an intervention at this important point in his speech, when he is talking about equipment. I am sure that he would attest to the vital role that the Nimrod aircraft play in UK efforts around the world. Will he examine closely the serviceability of those aircraft along with the important current focus on their safety?

John Hutton: Yes, of course I will. Ensuring that we have sustainable equipment and that we can service and maintain it at reasonable cost over the duration of its lifetime is a very important part of the overall procurement exercise. I can certainly give the hon. Gentleman that assurance.
	Before I was very nicely interrupted, I was saying that we have invested significant additional resources in re-equipping our forces, particularly in the operational theatres in which they are active. Just yesterday, my right hon. Friend the Prime Minister announced a further £700 million of investment in almost 700 new protected mobility vehicles, which will be crucial to our mission in Afghanistan.

James Arbuthnot: All those new vehicles are, of course, very welcome. How do they fall into the future rapid effect system programme? Is FRES dead?

John Hutton: These procurements are urgent operational requirements; they do not have any impact on FRES, which is an important part of the long-term equipment programme. Obviously, we are examining every aspect of FRES, just as we are examining every aspect of all the major equipment procurement projects in the pipeline, but these are operationally specific acquirements for the armed forces that are necessary to meet the particular circumstances, especially those in Afghanistan. I believe that this equipment will help to save lives and to improve the effectiveness of our operations in Afghanistan. Even in the most challenging of economic times, we are demonstrating that our commitment to equipping our armed forces remains clear and resolute.

Brian Jenkins: It is well received and recorded that we now have the best-equipped British soldiers in our history, as far as any activity is concerned. The insurgency and the enemy that we face has a changing pattern, so will we be given a guarantee that as and when requirements change, the money will be made available to ensure that our troops remain the best-equipped in the world?

John Hutton: I am grateful to my hon. Friend for his first point about the overall standard of the equipment that is in theatre. When I was in Afghanistan and Iraq last week, I asked every soldier, sailor and airmen to whom I spoke to tell me what was wrong with their kit. I was told, "There's nothing wrong with the kit, sir. If anything, it is too heavy." It is heavy for a fundamentally good reason. The new body armour—the Osprey body armour—can stop high-velocity rounds. I want these guys to come home, and the body armour will help more of them to do so, without fear of injury. I am not saying that more improvements do not need to be made. More improvements probably will need to be made, because the technology is evolving, as is the theatre. In response to his latter point, the Treasury has stood by Britain's armed forces; when extra equipment has been needed, the money has been found. I have no doubt that if there is a requirement for further equipment, it will be met from the reserve, as the nearly £9 billion of total additional theatre-specific spending since 2003 has been.

Richard Ottaway: Before the Secretary of State moves on from the section of his speech that deals with equipment, may I ask him a question about aircraft carriers? An aircraft carrier is a powerful weapon—it can deliver a weapon a long distance; it provides air cover; and it has diplomatic presence—but on its own it is a very vulnerable piece of equipment, because it needs anti-submarine defence, air-defence, Royal Fleet Auxiliary Service support, and airborne early-warning systems. Can he assure me that his plans for the Royal Navy will provide enough equipment to sustain a carrier on-station in sequence with the one that is off-station?

John Hutton: Yes, that is our intention.

Richard Ottaway: Without sacrificing any other operational commitments?

John Hutton: There is precious little point building two very expensive carriers if we are not able properly to defend and secure those assets. We have some very capable new ships coming into the Royal Navy; the new Type 45 destroyers are a superb addition to the fleet. We will need the Astute submarines to be able to be deployed, and our intention, as people in this place and my constituents know, is to build seven of them—that remains our plan. We will ensure that the assets to which we are committing are properly secured and defended.

Andrew MacKinlay: In my recent discussions with a senior officer, the criticism I heard was not of the quality of equipment in the field; it was that there was insufficient equipment of that quality that people could be trained on back home—that was the big deficiency. He said that troops go from being Robocop to being yeomen of the guard when they return. Many hon. Members are concerned that although we have some state-of-the-art equipment, which we welcome, it is insufficient, particularly in terms of preparation, training and replacement.

John Hutton: I agree absolutely with my hon. Friend about that. There is no point soldiers, sailors and airmen going out to theatre and coming across equipment that they have not met before, because that poses a risk to them and to the operations. We know from previous boards of inquiry and from some of the coroners' reports that the Ministry has been heavily criticised in this area. Part of the additional resources that my right hon. Friend the Prime Minister announced yesterday will go towards improving the training fleet for these vehicles, because it is essential that the guys are familiar with this kit. It is designed for their safety and protection, and it cannot undermine that, so we are putting in significantly more assets—I believe that about 30 of the new Cougar vehicles are going into the training fleet—to achieve precisely that.

Tobias Ellwood: May I follow on from the pertinent question posed by my hon. Friend the Member for Croydon, South (Richard Ottaway)? The whole point of aircraft carriers is their ability to protect themselves. We have removed the Sea Harriers, which had the ability to go up in the air and see over the horizon with their radar. Could the Secretary of State bring us up to date with what is happening on the joint strike fighter? Conservative Members feel that we will have these grand aircraft carriers, but there will be no aircraft suitable to fly on them.

John Hutton: As the hon. Gentleman can imagine, this matter is being addressed in the corridors of the Ministry of Defence as we speak. There are a number of options, including retaining the Harriers for longer periods. Again, I do not want to make the obvious layman's point, but if we are going to spend £4 billion on two new aircraft carriers, we must have some proper aircraft to fly from them. There would be no point in deploying the ships, even if we could properly protect them—and we will be able to do so—if they are not able to deploy on operations because there is no kit to fly from them. I assure him that when these carriers go to sea, they will be properly equipped and fully resourced.
	Any idea that UK troops on operations are under-equipped is out-of-date, ill-informed and inaccurate. May I turn to the challenge of building for the future?
	We cannot build for the future unless defence is well funded. Operations in Kosovo, Sierra Leone, Iraq and Afghanistan have borne out the strategic defence review's vision of a flexible, agile, expeditionary force structure, and we will continue on that transformational path. At the same time, the continuance of our nuclear deterrent will remain a fundamental part of Britain's defence policy, with a new generation of submarines to replace the Vanguard class—designed and built, with pride, in my constituency—in the years ahead.
	Since the comprehensive spending review, the defence budget will benefit from average annual real growth of more than 1.5 per cent. By 2010-11, the defence budget will be £3 billion higher in real terms than it was in 1997. That contrasts with the fact that defence spending fell in each year of the previous Conservative Government. In addition to the CSR settlement, some £9.5 billion has been provided from the Treasury reserve to meet the additional costs of operations in Iraq and Afghanistan since 2001. Like every other Department, the Ministry of Defence needs to live within its means.

Bob Russell: The Department's living within its means is good, but how much of that additional money will go towards modernising the married family accommodation? In many cases, that accommodation is woeful and does not help with the retention of experienced, skilled military personnel. We must bear in mind that we are already short of soldiers.

John Hutton: I think that the figure is about £8 billion for the modernisation of the defence estate, including the family and single living accommodation. That is a significant investment in the quality of the accommodation that we provide for our service personnel, and I saw evidence of that when I was in Faslane a couple of weeks ago. I know that the hon. Gentleman is worried about Colchester, but investment will also be made there. We are determined to see a step change in the standard of accommodation, and we are making pretty good progress.
	Hon. Members will be aware that in recent months the MOD has been examining its equipment programme. That work is continuing. My aim is to ensure that we bear down on costs where we can; drive up value for money wherever possible; maintain the principles set out in the defence industrial strategy; and prioritise spending within the objectives of the defence policy that I have set out today. I hope to be in a position soon to make further announcements on procurement.
	The contribution of defence spending to the economic health and vibrancy of many parts of the country is significant. Defence manufacturing, research, science and technology support more than 300,000 jobs in the UK, many of them high-value, high-skilled jobs. There continue to be significant export opportunities for UK companies overseas and, as Secretary of State for Defence, I intend to give full and active support to UK companies in accessing those markets.
	Resourcing and equipping our armed forces are two key pillars of building for the future. But there is no security for the UK in isolationism—in pulling up the drawbridge and hoping that our enemies will stop at our front door, because they will not. We need strong bilateral and multilateral relationships to advance our essential security interests. Through NATO we have taken a collective approach to defence, providing the bedrock of our security for nearly two generations. NATO's operations in Afghanistan and Kosovo, and the vital role it plays in security sector reform, show how far it rightly continues to underpin our security. I especially welcome President Sarkozy's commitment for France to join NATO's command structure.
	It is also self-evident that change is needed within NATO itself. It is still coming to terms with the reality of its role in a post-cold war world. At Budapest, I shared the frustration of those who wished to see more rapid progress in several areas. We must reduce the level and scale of its bureaucracy. NATO is still over-reliant on countries such as the US and UK to do most of the heavy lifting in operational theatres. Collective security does not mean guarding one's own garden gate and leaving a disproportionate burden on others to do everything else. Just as we are rightly debating the effectiveness of multinational financial institutions to cope with the reality of today's economic crisis, we should be asking whether our multinational security institutions are properly structured and equipped to deal with the challenges of modern times.
	NATO alone will not always be the most appropriate vehicle through which to secure our national interest. Front and centre of UK defence policy will continue to be our deep and enduring relationship with the United States. That relationship is unlike any other. But, as I have already made clear, we should be pragmatic not ideological about the role our European partners can play in promoting UK security interests. We have moved on from a world in which we saw a zero-sum impact between the strength of our European partnerships and the effectiveness of NATO.
	I believe that 2009 will be both a real test and a great opportunity for the reform of those multilateral security institutions. Whoever wins the US presidential election next week will, I believe, be keen to promote stronger and deeper multilateral relationships in defence of common interests. There could well be a strong momentum for reform and I want the UK to be leading that debate.
	I have set out this afternoon the key tenets of our defence policy—delivering operational success, readiness for new tasks and building for the future. By delivering against all three objectives, we will ensure that the UK remains as secure from external threats and protective of our interests overseas as it can be. To achieve that, we rely today, as we have always done, on the extraordinary, brave men and women of the armed forces and the civilians who support them in theatre. Those who implement defence policies have a far more dangerous and difficult task than those who make and scrutinise them. So let all of us in this place put aside all other loyalties and unite in giving them the support and praise that they so richly deserve.

Liam Fox: May I begin by associating the Opposition with the tributes paid by the Secretary of State to all the men and women in the armed forces, their families and all the civilian bodies who make sacrifices at all times for our security? As this is the first time that we have faced each other at the Dispatch Box, I also welcome him to his new position. I worked with him—or against him, depending on one's interpretation—when he was at the Department of Health, and he always brings great intellectual effort to his portfolio. He arrives at the Ministry of Defence at a difficult time, but he will find that defence policy is much more bipartisan than health policy. The objections that the Opposition raise to policies are about implementation and detail, rather than broad strategic interests.
	I also wish to pay tribute to the Secretary of State's predecessor, the right hon. Member for Kilmarnock and Loudoun (Des Browne). He was open with information and always willing to share it with the Opposition. He gave us great access to all parts of the MOD and other bodies, and I regard him as a personal friend as well as a colleague. He is a man of great integrity and I hope that, should he so wish, he will return to the Front Bench.
	The Secretary of State spoke about the budget and the need to match resources and commitments. He takes over the Ministry at a time of severe pressures on the core budget, and we are all aware of reports and studies by the Defence Committee and others about unfunded liabilities. We still have the problem that we are using the defence planning assumptions of 1998, planning for a tempo that does not take fully into account what has happened in Iraq and Afghanistan. Some will argue that the urgent operational requirements have been over-used. They were useful for getting what we wanted when we wanted it, but at the cost of stability and predictability in long-term procurement.
	The right hon. Gentleman also inherits problems such as the deal between the Treasury and the MOD that all UOR costs above £900 million a year would be refunded 50 per cent. by the MOD, which has resulted in a £400 million cut in its core budget capabilities this year, and the cut of £1.4 billion in the future rotorcraft capability budget in 2004, which has led to a chronic under-availability of helicopters. As the hon. Member for Thurrock (Andrew Mackinlay) said, there is also a shortage of equipment for training before deployment, which is one of the biggest complaints we now get from soldiers in theatre. To be fair, I have to say that when I ask soldiers on the front line whether they have problems with personal kit, the answer has changed substantially—as the Secretary of State said—even in the past couple of years. We welcome that, but the chronic under-availability of airlift capacity needs to be urgently addressed.
	The Secretary of State mentioned the role of NATO. We need to examine in some detail that role, the contribution of NATO members, which he mentioned, and the relative roles of the EU and NATO. The role of NATO was easily defined, politically and militarily, in the cold war. Its purpose was to stop the spread of communism in Europe and, if necessary, to stop the Soviet Union physically. It has become less clear in recent years exactly what the political and military roles of NATO are. There are those who talk about a greater need for out-of-area operational capability and those who still talk about the primary role of defence of the European continent. We must make it very clear that it is not a choice between those roles. We need both those capabilities, especially in a globalised economy where our interests can be threatened in many more places and by many more actors than they would have been in the past. Politicians cannot simply have the upside of globalisation without dealing with the downside, which is the unavoidable importation of strategic risk.
	We in the House need a clear, bipartisan view that speaks for this country in the international field about the need for NATO to be able to respond to all the types of threats that this country can face. We have a problem, however, with the level of commitment of some NATO members. Only six out of 26 make the 2 per cent. of GDP contribution to the defence budget that they are supposed to make. That is woefully inadequate and deprives NATO, as a whole, of a huge amount of resources. There are too many caveats, too many restrictions and too little political will even to use the resources that are available. Not only is that a weakness for NATO, but it adds a disproportionate burden on those countries—such as the United Kingdom, the United States, Canada and the Netherlands—that are willing to do the fighting.
	The Secretary of State pointed out that we were doing too much of the funding; we are also doing too much of the dying compared to other countries that should be carrying a bigger share of the collective responsibility they are supposed to have as members of the alliance. The message must be clear: "Do not join NATO if you simply want to be a peacekeeper or if you want to get defence on the cheap." Membership implies financial responsibility—it is not possible to get an insurance policy without paying the premiums—and military responsibility, as well as a willingness to respond to the article 5 responsibilities and commitments if required.
	It would be nice if it was possible to make the choice to be simply a peacekeeper, but a peacekeeper can work only if there is a peace to be kept. Sometimes, peace has to be fought for and, sometimes, it has to be died for. That is a message that we should send at all times to our allies.

Brian Jenkins: Would the hon. Gentleman please distinguish between the military leaders and the political leaders across those 26 states? We have found that it is not that their militaries lack resolve, but that their politicians lack the will.

Liam Fox: Indeed, I just said that there was a lack of political will even to use the assets when they are available. Those serving in the armed forces of other countries joined their armed forces to be a part of a defensive fighting force, if necessary, and I think that they find it just as frustrating as we do to be tied with red tape, caveats and restrictions by their respective Governments. I hope that the debate in those countries will be a vigorous one.
	What should the roles of NATO and the EU be, in that case? If the EU is to have a constructive role, it needs to do what NATO cannot or does not do. The Opposition have always been happy with the EU acting as a delivery mechanism of NATO policy, especially in areas such as security sector reform, the rule of law missions and so on—areas where NATO has never been very well configured. There is certainly room for greater bilateral co-operation.
	I echo what the Secretary of State said about what is happening in France. I know that many people are sceptical about the motives of President Sarkozy, but we need to recognise that we must seize the moment. We have been encouraging France for a long time to return to the integrated command structure, to have a rapprochement with the US and to become much more involved in future planning. If we now say, "Well, it's not real," we are in danger of failing to recognise that this is a potentially important time. We need to welcome the move, because if the moment is lost it might be some time before it comes back. Proof of that fact, if proof were required, can be found in the French defence White Paper, which saw a fundamental reshaping of French forces along lines much closer to the sort of expeditionary capability that we have long encouraged them to try to have.
	There are positive developments along those lines. But—there has to be a "but"—a greater role for the EU in soft power cannot be used as an excuse to avoid basic NATO military obligations. Frankly, the duplication of NATO structures—double-hatting—does not improve increased capability. Action needs assets and we cannot have competition for scarce resources. In the US in particular, we hear politicians saying that Europe must do more for its own defence and for the defence of the alliance. I think that most of us would echo that. It cannot just be a short-term pragmatic approach; the structural relationship between NATO and the EU needs to be properly thought out.
	Let me give a single example. Piracy is a major scourge of our sea lanes. Combined Task Force 150, which is part of Operation Enduring Freedom, is off the horn of Africa with 14 or 15 ships. It is working under the US fifth fleet. NATO is there with Standing NATO Maritime Group 2; that is another seven ships or so. Now we are to have an EU mission. Why? Other than flying the EU flag, what can that achieve that we could not achieve by augmenting one of the two existing missions? What will the command relationship be? Who is in charge of the area of operations? When we asked those questions, we were told that there would be close co-operation, but that is not really a sufficient answer. We need to know why the EU felt it necessary to become involved in something that was already being done by United States and NATO missions. We are not getting particularly good answers.

John Smith: I am listening carefully to the hon. Gentleman, and I remind him of what he said about political will. Does it matter where the political will of our European allies comes from, as long as they deliver the capability? The operation may offer them a way to do that.

Liam Fox: It does none of us any good to duplicate command structures and effort. If such missions already exist, we would do better to augment them than to set up a separate mission. One has to ask what the primary motivation is. Is it providing capability for the mission, or is it having a separate political identity?

Tobias Ellwood: My hon. Friend is making a very important point. There are two military missions in Darfur: an EU military mission and, just down the road from it, a NATO mission. Both have about a dozen British soldiers. It can be very confusing for those in uniform to understand exactly who they are supposed to be working for, and who is involved in the operations with them. That was emphasised in Bosnia. When I was serving there, we were delighted to get rid of our UN uniform and go back to NATO: we firmly understood where we were and who the orders came from.

Liam Fox: It is entirely possible for EU missions to complement what we are doing in NATO, if those missions do things that NATO does not. The trouble arises if the missions become competitive; that is my point about the missions in the horn of Africa. At a time of scarce resources, we in the west should not waste resources by duplicating effort.
	The Secretary of State sensationally appeared on the front pages at the weekend, when there were reports of his support for an EU army. Of course, that was enthusiastically welcomed in the Brussels press. It is important for us to say what we think the appropriate relationship is. We believe that our defence relationship with our partners in the European Union should be intergovernmental, not supranational. Permanent, structured co-operation can easily become the precursor to a standing EU force. The European Defence Agency could easily become the precursor to a single procurement body. Under the Lisbon treaty, the European Commission will have a role in the EDA. The high representative for the common foreign and security policy will be vice-president of the Commission and head of the EDA, and that brings in an element of supranationalism that was not there before. The high representative will have a role of initiative in military operations, and we simply do not find that an acceptable way forward for the United Kingdom's defence relationships. It is not pathetic to oppose that; we believe that it is our duty to do so.

John Hutton: I was not going to interrupt the hon. Gentleman, but he made me do so. As I am sure he will know, the headline in  The Daily Telegraph was not exactly the headline that I aimed to create. Let me make it absolutely clear that I am not in favour of anything being done, anywhere and at any time, that undermines or compromises our commitments to NATO and our special relationship with the United States. It is not my view that that was accurately reported. I know that the hon. Gentleman has firm views about everything European, and we have had a taste of that today, but he can afford to be less paranoid about some of these issues.
	May I pick up on one of the hon. Gentleman's points about Somalia? He referred to Combined Task Force 150, which is, as he knows, an Operation Enduring Freedom deployment. He will know that many NATO allies will not, given the context, have their forces serving alongside it. The European security and defence policy anti-piracy mission to Somalia is exactly the sort of example he was looking for. It is a complementary deployment that will boost the effectiveness of the anti-piracy operation in the horn of Africa, not undermine it. I hope that he will have another look at that.

Liam Fox: The point I was making was that we already have a NATO mission there anyway, so what does the EU bring to that area that NATO cannot? I understand that the headline was not what the Secretary of State intended, but he knows that any term used in relation to the European Union and defence is heavily loaded with all sorts of hidden meanings, and no doubt he will be well into that debate as we move forward.
	The Secretary of State concentrated on Afghanistan for the bulk of his speech and, clearly, that is the top priority for NATO at present. He correctly reiterated the main reasons for our being there, the first of which is our national security. It is often forgotten in the debate about Afghanistan that we are there primarily for our own safety.  [Interruption.] I am well aware that that is what the Secretary of State said, as the Under-Secretary, the hon. Member for Grantham and Stamford (Mr. Davies), says. I can hear and I can understand the Secretary of State's comments. As I was saying, the fact that we are there primarily for reasons of our national security is important and we must reiterate it at every point, because sometimes the debate about Afghanistan is lost in the language of reconstruction.
	Reconstruction is very important in our ability to create a stable state, which is part of our long-term plan, but we also need to remember that success in Afghanistan is important for both the cohesion and credibility of NATO in the longer term. If we fail in Afghanistan, what credibility do we have elsewhere? It is perhaps an existential mission for Afghanistan but, notwithstanding our military capabilities, there is a danger of the broader operation in Afghanistan becoming a shambles, with everyone and no one in charge.
	I was recently asked about the strategy in Afghanistan, and I was moved to ask, "Which strategy?" Was it the UN strategy, the NATO strategy, the American strategy, the Afghan Government strategy or the reconstruction strategy? All too many strategies seem to be going on at the same time, and all too few are properly integrated. As has been said recently, it is certainly true that we cannot have a purely military victory in Afghanistan, but we can have a purely military defeat, if we are not careful and we do not have the appropriate commitments. We need to be clear about how we will ultimately make the transition from a largely military operation to what will ultimately be a civilian mission over a longer time scale.

Harry Cohen: I draw the hon. Gentleman's attention to an article in  The Sunday Times on 12 October by Christina Lamb, an embedded reporter in Afghanistan, in which she refers to having dinner with Brigadier Carleton-Smith who told her
	"we should stop thinking in terms of defeat and victory. We need to lower our expectations...We're not going to win this war; it's about reducing it to a manageable level of insurgency that's not a strategic threat and can be managed by the Afghan army."
	He went on to refer to
	"trying to achieve a political settlement that might well involve giving some power to the Taliban."
	Does the hon. Gentleman agree with that approach?

Liam Fox: Not as it is put there, although there are some elements of truth that both the Secretary of State in what he said and I in what I am about to say would take from that.
	There has been much discussion about the parallels between what recently happened in Iraq and what is happening in Afghanistan. However, the differences are that, first, in Iraq we were talking about reconstruction, while in Afghanistan we are talking about construction. There is very little to reconstruct in Afghanistan, and that makes a big difference. There is a substantial middle class in Iraq, which does not exist in Afghanistan, and, again, that will take a long time to develop. Clearly there are political elements that need to come into play before we can talk about a mission being completed or a victory, but we must accept that were we not to have a military presence there, we could go back to handing over a space to those who are fundamentally opposed to our national interest. That would be quite unacceptable, not least given the sacrifices that our service personnel, our allied service personnel and our taxpayers have made so far in Afghanistan.
	Many people have talked about the surge in Iraq and whether that could be applied to Afghanistan. We must be careful about this, because in Iraq there was a genuine political purpose behind the surge. General Petraeus saw putting extra troops on the ground as a way of supporting a political impetus, which was to separate out the reconcilable and the irreconcilable—the point that was being made about those who could be brought into the process; a point that the Secretary of State made. What would be the purpose of such a move in Afghanistan at present? We are not at the same juncture; simply putting more troops on the ground would risk inflaming the insurgency without our having anything specific to support. As Frederick Kagan, a senior fellow at the American Enterprise institute and the architect of the Iraqi surge, said, Afghanistan is not Iraq and we cannot just template Iraq's solutions on to Afghanistan's problems. We need to understand that.
	For example, Afghanistan has 10 major ethnic groups; there are only two in Iraq. A major part of the Iraqi surge was the creation of the conditions for the Sunni awakening, and the structure and beliefs of Iraq's tribal system allowed that to occur. However, it is very unlikely that pashtunwali, the Pashtun tribal code of honour, would allow that to happen easily in Afghanistan. In the House and outside, we have to be wary about simplistic solutions that apply what happened in one place to another; there is no guarantee that they would necessarily succeed.
	If we are to be successful in Afghanistan, we need a clearly defined end state, which we have not had until now. We need realistic benchmarks so that we do not fool ourselves into believing that we are making progress when we are not. The recent National Audit Office report into the Department for International Development was a shot of reality in respect of what has happened there. Above all else, we need realistic expectations. Pretending that we can achieve things quickly does no good to the political case of those of us who believe in our engagement in Afghanistan, and it does no good to the morale of our forces or to public support in this country or those of our allies. Afghanistan is not Iraq; it is about construction, not reconstruction, and that will take time. Noble purposes are all very well, but they have to be allied to realistic time scales. If they are not, things become unsatisfactory and unhelpful.

Richard Benyon: Does my hon. Friend not feel that, in respect of what was said previously, we need to educate people about a counter-insurgency war such as that in Afghanistan? Such battles are not won as they were in the Falklands, as people who read the media often think. We win one victory when we get a turbine into the Kajaki dam and another when that is connected to 2 million homes. We need to inform people about what we are trying to achieve and to be able to measure that.

Liam Fox: Indeed; my hon. Friend is exactly correct. Having clearly definable benchmarks is essential to show what progress we are making. There are too many simplifications. People mention "talking to the Taliban", but who do they think the Taliban are—a club with a membership? They are a changing number of people who will move around the border and change allegiances and sides at different times. We have to be realistic about what we are dealing with. If any country should understand from its own history that we have to work with what we get, not what we want, if our mission is to succeed, it should be the United Kingdom. We need to consider that.
	We have seen success elsewhere. Like the Secretary of State, I have recently returned from Iraq. I wandered around the centre of Basra without body armour or a helmet. We were held up as we approached the city because so many people were going shopping with their families that there was a traffic jam. Such a scene would have been unthinkable a relatively short time ago. It is possible to bring change. All those who were against the intervention in Iraq might want to go to Basra and see what difference that intervention has made. People there now not only have a say in determining the future of their own country and taking control of their own destiny, but live in an infinitely improved security environment. They do not even talk about security as one of the issues; they talk about employment, electricity and water because the terms of debate have fundamentally changed as a consequence of military action. We should remember that whatever people say about more recent events in Basra, the commitment of our armed forces to the coalition of the willing in Iraq has made a change for people in that country. Once in a while, I would like those who were against the war in Iraq to recognise that some good things have now come out of it for the ordinary people there, rather than only wanting to see the downside.
	Clearly, our mission in Iraq is changing. During my last visit, I spoke to General Mohammed as well as political figures. The general made it clear that the British period of military operations is coming to an end and that it is time for our troops to come home whenever that is possible. I still think that it would be a profound mistake to produce a timetable for the withdrawal of our troops from Iraq, but we can now clearly see that it is going to happen sooner rather than later. It will depend on conditions on the ground and, to some extent, on the incoming American Administration. It is possible that the current overstretch might be diminished, at least in some small way, but that will depend on what decision the Government take on future deployments to Afghanistan.
	The Iraqi people find themselves, at least in one respect, more fortunate than ourselves, in that their Government have a fiscal surplus of some $72 billion this year, predicted to be $90 billion next year. It is astonishing that there is no representative from the Department for Business, Enterprise and Regulatory Reform in Baghdad, because contracts for reconstruction are being, and will be, picked up by the Americans, the Germans, the French and the Russians. Given our commitment to Iraq, it would be unthinkable were we not to have appropriate representation in Baghdad to ensure that British companies get their fair share of the reconstruction contracts.  [ Interruption . ] A personal visit from the Secretary of State might indeed be welcomed on both sides of the geographical divide.
	One thing that the Secretary of State did not mention—I hope that the Minister will do so when he winds up—was what has happened with Russia. Since our most recent defence debates, we have seen the events in Georgia, where Russian intentions may not be benign, to put it mildly. Russian forces inside the sovereign territory of Georgia could now cut off Caspian oil and gas supplies to the west within hours. We know about Russia's $208 billion dollar military build-up, paid for under the stabilisation fund, and its apparent intentions in the Baltic, the Mediterranean and the Arctic. In a defence debate of this nature, we should hear about how the Government perceive what may be an increasing threat from Russia.

Andrew MacKinlay: This is in no way to agree with the conduct of Russia, but some of us were bewildered in the summer by the cosy consensus between the Government and the Opposition in persisting with the concept that Georgia could come into NATO without that prejudicing article 5 of the NATO treaty. It seems ludicrous, in terms of our defence, that the Opposition and the Government persist in the idea that that is tenable while maintaining the credibility of article 5, which has been so important to us since the 1940s, and the full protection offered by it. It would devalue that commitment, and we would pay a heavy price if we allowed Georgia to join NATO under those circumstances.

Liam Fox: Entry into NATO has to be agreed by both parties—those who are already in NATO have to give the security guarantee and the incoming country has to fulfil certain legal obligations, not least that any territorial disputes must be resolved. Georgia's entry into NATO would affect how Georgia operates in the region. Membership of NATO does not come automatically—it must be earned. That seems to have been forgotten at the present time.
	I want to end with some questions for the Minister about personnel. None of what we have discussed is possible without the brave men and women who make up our armed forces. I thank my friends, Freddie Forsyth, Simon Weston and those who took part in the Conservative party's military covenant commission. I should like to raise three issues of some urgency. The first concerns decompression. The target is that those coming out of theatre should get up to two weeks' decompression time among their colleagues to deal with the consequences of stress and combat before returning to bases in the United Kingdom or back to civilian life if they are in the Territorial Army. I was surprised to discover that civil servants in the Foreign and Commonwealth Office who spend time in Iraq get a compulsory two weeks' decompression out of theatre every seven weeks. We are lucky if some of our soldiers are getting much more than 48 hours decompression after a six-month tour. That is not to say that the FCO civil servants are treated wrongly, but it provides some clarity about why there is so much unhappiness about the issue. It is important to talk about decompression because more evidence is emerging about the possible development of long-term problems associated with post-traumatic stress disorder. Decompression is an essential means of reducing the temperature for those who have been in theatre. If they are being short-changed for operational reasons, that is not acceptable. We may pay a high, long-term price for what are very small short-term gains. I am sure that the whole House shares my concerns, and I hope that we can have an immediate review of the time given for decompression.
	Secondly, the air bridge is a continuing problem that saps morale. We need urgent action and if we cannot have sufficiently robust RAF aircraft to carry out such duties effectively, the Government have a duty to ensure that we get them from somewhere. It is quite unacceptable for servicemen and women to be left for long periods waiting on their leave to return to the United Kingdom.
	The third issue is the one highlighted in the press today: hearing loss. I was not going to raise the issue until I saw what the Ministry of Defence had said. Clearly, too many servicemen and women are already not fit for service. If we have a 10 per cent. recorded level of hearing loss that is judged to be moderate to severe, which will prevent personnel from serving in the future, that is a big problem. I would like that matter to be looked at urgently. I regret the statement from the MOD, which stated that
	"the majority of hearing impairment cases cannot be directly attributed to deployment".
	It sounds like a classic washing of the hands, and it is not sufficient.
	Finally, we have talked a lot about our servicemen and women and civilian groups that support them. There is one other group to remember, however, which is our charitable sector. There are many in this country who say, "These things should not be left to charities; the Government should deal with them." I happen to believe that the charitable sector is extraordinarily important because it reminds citizens of their responsibilities to other citizens and does not allow people to abdicate their responsibility on to the state. Help for Heroes, Combat Stress and so many other charities are doing invaluable work, and are thanked too seldom in this country for what they do. The armed forces, families and charities all enable us to have and support the finest services in the world, and at this time of year more than at any other, we should thank them.

Several hon. Members: rose—

Madam Deputy Speaker: Order. May I remind all hon. Members that Mr. Speaker has imposed a 12-minute limit on Back-Bench contributions?

Andrew MacKinlay: I will be swift in view of the time restrictions, but I would like to raise one point of a historic nature before I move on to Helmand and other contemporary issues.
	I have to express some disappointment that the Government did not do more to commemorate the 90th anniversary of the first world war armistice. In the short period that he has held his post, the Under-Secretary of State for Defence, my hon. Friend the Member for North Durham (Mr. Jones), who has responsibility for veterans, has gone to enormous lengths to remedy that omission, and there is to be a ceremony on 11 November at the Cenotaph. I welcome that, and I congratulate him.
	However, as I pointed out when I raised this matter a year and a quarter ago, it is not just about commemoration—other things flow from it. We can remind young people about the important and seminal nature of the world war one conflict: how we went to war with cavalry and emerged with weapons of mass destruction, and how the first, embryonic international courts of justice were established to deal with war crimes, such as the trials in Leipzig. We can remind them of women's suffrage and all the social change that took place. It has been a great missed opportunity. I want to acknowledge the Under-Secretary's initiative and applaud it, but I am disappointed that we did not seize the opportunity, particularly as we want to tell youngsters how important it was and what our armed forces were committed to. Although that war was prosecuted in a sloppy manner by some, the principle on which the UK went into that conflict, and the reason why Sir Edward Grey stood at the Dispatch Box, was a matter of international law. We tend to forget that. The UK got into world war one on a matter of important principle. Its prosecution by generals and others might not have been satisfactory—the carnage was appalling—but the principle was right and the United Kingdom should be proud.
	Events such as commemorations help recruitment. They encourage people to think about the armed forces as a career, and we need to do much more about that. I am told—perhaps the Minister will correct me—that 10 per cent. of our Army recruits are from overseas. All are welcome—many of those men and women are most dedicated—but there comes a point when it is neither comfortable nor healthy for a disproportionate number of recruits to come from overseas. A few years ago, I think that the figure was 3 per cent.—there is no sign of the trend abating or reducing. Things that encourage our best young people to join the armed forces should be fostered. I mentioned the loss of the opportunity of commemorating the 90th anniversary of the armistice, but many other events are important.
	In the United States, there is pride in uniform. I appreciate that we now encourage our armed forces to wear uniform whenever possible, and I understand why that did not happen in the past 20 years for reasons of combating terrorism, but we need to do far more. In a future debate, perhaps we could consider not merely using our reserve armed forces as ways of filling gaps or of simply bringing in special skills—although that is important—but moving them as units into conflict or peacekeeping situations.
	I am proud to have 400 Nepalese Gurkha families in my constituency and I am totally bewildered by the Government's continued stance towards them. Although the matter may be for a Home Office Minister, I believe that the Defence Secretary has an enduring pastoral role to play for those families. I therefore urge him to resolve the problem. The British Government have lost in the courts and public opinion is with the Gurkhas. It is a matter of justice and it is also popular, and I cannot understand why the Government cannot get their head round it. They would be applauded rather than criticised if they acknowledged those people's right to have citizenship here and so on. I ask the Secretary of State to take the matter up with the various relevant Ministers.
	Thurrock RAF Association has made representations to me that it is worried about some impediment to getting parcels to our troops in Iraq and Afghanistan. Perhaps the Secretary of State or the Minister who responds to the debate can clarify the procedures and protocols, because I understand that they have received representations from RAFA criticising the arrangements and I would like to be able to reassure people that there are no such impediments.

Bob Russell: The most important thing is ensuring that parcels from families get through as a priority. If too many people show good will, especially at this time of year, many of our service personnel in Afghanistan and Iraq will not get the family parcels. We need to be careful.

Andrew MacKinlay: I am obliged to the hon. Gentleman. I asked Ministers, in fairly temperate terms, to clarify the position so that we can reassure people or explain the problems. If there are impediments, can they be overcome?
	I will talk about Afghanistan and Helmand province shortly. I know that other hon. Members have experienced the sadness of having to attend a constituent's funeral. Recently I attended the funeral of constituent Nicky Mason of 2 Para, and I want to acknowledge his bravery in the field. He was highly regarded by his fellow soldiers and popular in the community of Aveley. We salute him today. We hope that his sacrifice and that of his colleagues has not been in vain and will produce a better political climate in the region.
	The funeral brought home to me my obligations as a Member of Parliament. I say that because I cannot help but feel that a little while ago we as a Parliament failed in our duty. I remember when our green screens said that there was a statement by the Secretary of State for Defence and we came into the Chamber to hear it. I must admit that Helmand was not really on my radar screen, but we were told that we were committing our armed forces to that region. We can say with some pride that the United Kingdom stepped up to the plate in Helmand, but at the time none of us fully envisaged either the scale of the commitment that we were making or the absence of support from other countries. That troubles me a great deal.
	This week I asked the Secretary of State in a parliamentary question to indicate which of the 13 districts in Helmand province were under the control of the international forces or the Afghan army. His reply was that we had "presence" in a number of districts, but that was not the question that I asked. I asked which districts we controlled. Sometimes we need to be told the naked truth. The Government have a duty to tell us as a Parliament precisely, as of this afternoon, what we control and what "control" constitutes. Does control of a district mean a flag and a policeman in one of those fort-like places or does it mean something better than that? Some people are not prepared to ask difficult questions, so I repeat my questions to the Secretary of State: what districts do we control, which do the Taliban control and which are indeterminate, and what constitutes "control"?

Harry Cohen: Some of us think that efforts should be made to reach a political solution. There were rumours that the British were talking to some of the insurgent leaders, but that they had their knuckles wrapped by the Americans for doing so. We know that King Abdullah of Saudi Arabia has tried to start political talks, but we heard nothing from the Secretary of State about that process. Should something not have been reported to the House?

Andrew MacKinlay: In fairness to the Secretary of State, that is a matter of foreign policy. However, we are entitled to know in a defence debate what the military situation is. I fully acknowledge that in large tracts of Afghanistan there is relative stability and normal life—to the extent that there is normal life in that part of the world. However, I am deliberately referring to Helmand province, which is a large territory where the United Kingdom has stepped up to the plate, almost alone it would seem. That is why I feel an obligation as a Member of Parliament to probe on the issue. I am sure that everyone acknowledges that we need some political initiatives in our overall policy towards Afghanistan. Indeed, both the Government and the Opposition have acknowledged that, as do I. I also acknowledge some success in the country as a whole, but Helmand is costing our servicemen and women's lives. Therefore, we have a special obligation.
	Reference has been made to NATO. One problem is that UK industry has tried—and to some extent succeeded—persuading the emerging democracies of central Europe that have joined NATO to re-equip their air forces with planes that we wish to sell to them, for perfectly legitimate commercial reasons. However, given those countries' contributions to NATO, they do not need super-duper air forces. Their best contribution could be made by providing some more heavy lift and so on. We need to discuss in the coming period how NATO can have true interoperability and how people can make a real contribution to the alliance, rather than going for a national status symbol. I understand the significance of air forces, but we have tried persuading those countries—and to some extent we have succeeded—to kit themselves out with fighters and other sophisticated and expensive equipment, which frankly do not add to NATO's clout or influence in the world.
	Finally, the Opposition spokesman referred to piracy around the world. I am concerned that, for example, in the Turks and Caicos Islands, which is an overseas territory, there is an acute problem of people smuggling and refugees, mainly from Haiti. That island Government do not have the resources to control or to police that problem, yet the Royal Navy does not have a permanent presence there. I would have thought that protecting our overseas territories would be core business for our armed forces. We also have an obligation to the population of those territories. Also, out of naked self-interest, we do not want such a burden to emerge in these small territories, because we will eventually have to absorb the resulting illegal immigrants and refugees. I realise that there is a problem of resources, but it should be part of our core business to protect and promote small overseas territories, particularly in relation to illegal smuggling of people, refugees and so on.
	I am pleased to have had this opportunity to rehearse these points in the House today. As all other Members have done, I congratulate our armed forces personnel on their dedication, on the courage that they demonstrate and on the skills that they bring to bear in very testing circumstances. I salute them. We, as a Parliament, owe it to them to be more probing into whether we are succeeding. We might not like to hear the news, but if we are not succeeding due to certain deficiencies, it is down to us to vote the moneys and the resources to ensure that those people are fully equipped.

Nick Harvey: I start by echoing the words of tribute to the men and women of our armed services at every level, on the front line and at home, and to those who help and support them, those who equip and supply them, and those who look after them when they come back. In particular, I pay tribute to the constituents of my hon. Friend the Member for Colchester (Bob Russell), who have just returned from a gruelling tour of duty in Afghanistan, and to my own constituents, the marines and engineers who have gone out there to take over from them. We should all be very proud of what they are doing, often in very difficult circumstances.
	I should also like to welcome the new Secretary of State to his new responsibilities. Like the hon. Member for Woodspring (Dr. Fox), I recall shadowing him in his health role some years ago. I was rather surprised when the hon. Member for Woodspring suggested that he expected to find a more bipartisan atmosphere in our debates from now on, but he then went on to surprise me, because I found myself agreeing with much more of his speech than I usually do. It was one of the best speeches he has made on defence. Perhaps I was wrong to think that we would not find bipartisan support for a number of things, because, in fact, we are doing so.
	I also pay tribute to the Secretary of State's predecessor. I entirely agree that he was a straight and decent man, who did a difficult job in very trying circumstances. Rumours have been circulating all year that, when a reshuffle came, he wanted to divest himself of his responsibilities. I have no idea whether that is true, but I think that he can look back at the time he spent as Defence Secretary with pride and satisfaction.
	For five years, defence policy has been focused on, and to a great extent overshadowed by, our intervention in Iraq. Sometimes to the detriment of our forces, our capabilities and our wider operations, the Government have remained somewhat too steadfast—to my taste—in their involvement in that country. That has had a considerable cost. During the time of our involvement there, we have lost the confidence of many allies and friends around the world, and diverted our attention away from the real problems, not least those in Afghanistan, which predated our involvement in Iraq.
	We now have a new Secretary of State in charge, however, and I very much welcome what he said at the weekend, and again in our debate today, about the drawing down of our forces in the region. It may be that our time there is drawing to an end, and if so, I welcome that very much. I know that our troops are currently involved in training the 14th division of the Iraqi army. The previous Secretary of State said in an answer in early September—I think that the new Secretary of State has more or less confirmed this today—that this will be completed early next year. I gather that we are also anticipating handing over the Basra air base by the end of this year.
	I very much hope that we can assume that we are coming to the end of our significant engagement and that we have not been given yet another elastic deadline. Questions need to be answered about the draw-down to what I understand will be a few hundred troops remaining. I am particularly keen to understand where they will be and how they will be protected. The Minister of State was asked in the Select Committee on Defence about the minimum scale of forces that are capable of protecting themselves. If we are talking about drawing down to a few hundred, clearly they will not be able to protect themselves.
	I think that we have a much more sensible basis on which to build a long-term bilateral partnership with Iraq of the sort that the Secretary of State was defending. I see no problem with, or have any objection to, British expertise continuing to be available as the Iraqi army and nation rebuild themselves. If we want to be friends of Iraq, it is appropriate that we should do that, and the sooner that we bring our skills and expertise to Iraqis in modest numbers and not by dint of keeping a self-protecting force there, the better it will be for Iraq, for our involvement in Afghanistan and for the strain on our resources, manpower and finances. I hope that we are seeing the beginning of our withdrawal from any significant engagement in Iraq.
	I appreciate that we will have to wait a little longer to hear the terms of the bilateral deal that will be agreed between our Government and the Iraqi Government beyond 31 December, when the UN mandate concludes, but I hope that the House will discuss that in detail at some point. We also await with interest the attitude of a new American Administration. We will know soon what political complexion that will be, and we have heard slightly different remarks from the two candidates as to their view of long-term involvement in Iraq, but perhaps in either case we should judge what they say in their early days in office rather more than what they had to say on the campaign trail. I think that from early next year, more and more of our defence debate on current operations will focus, as it needs to, on what we are doing in Afghanistan, rather than on what we have done in Iraq.
	I opposed our involvement in Iraq. To pick up on a point made by the hon. Member for Woodspring, I am not aware of anyone who says that our troops have done nothing beneficial in Iraq. It is not my view that they have been in any sense wasting their time there or that they have not contributed something positive to the well-being of the people of Iraq. However, it is a measure of how badly planned the post-war involvement was that a full five and a half years on, we are discussing issues such as the availability of power and water, which in some parts of Iraq are not back to the state that they were in during Saddam's regime. I welcome any progress that we can make, but we should not be in this situation five and a half years on.

Liam Fox: As a matter of interest, the objection of the hon. Gentleman's party was based not on the quality of the planning for the post-conflict scenario, but on their view that we should not have been there in the first place. Had we not been there, the people I met in Basra would not have the improved security there; nor would they be looking forward to some of the material benefits that might accrue as a consequence.

Nick Harvey: That is not what I said. The hon. Gentleman is trying to have it both ways. I do not recall that a purpose of invading Iraq was to restore the water supplies. As he well knows, our objection was that it was completely illegal and we were sold a duff prospectus on the purposes of the engagement. However, I honestly do not think that at this stage there is a great deal of purpose to be served by trawling over all that.

Linda Gilroy: rose—

Nick Harvey: I can see that it is too much for some to resist.

Linda Gilroy: Does the hon. Gentleman seriously think that having seen off the weapons inspectors, the dictator Saddam Hussein would not have become an even more serious threat to the security in that region at that time and, therefore, to our security at home?

Nick Harvey: That was certainly not my assertion, but, as the hon. Lady knows perfectly well, the terms, timing and nature of our involvement in Iraq were issues of profound division at the time, and remain so to this day.
	However, attention now turns to Afghanistan. As the Secretary of State observed, there are fundamental problems there, and the position is very complicated. No one ever said that it would be easy, and indeed it will not—it will clearly be a very long haul—but we need to retain a steadfast commitment, and this is by no means a time for faint hearts.
	During his short time in office so far, the Secretary of State has already visited both Afghanistan and Iraq, and I welcome what he has said since his return. It is clear that there are complex issues for us to tackle. Our involvement in Afghanistan looks set to last for many years, but I am still not convinced that the general public are entirely clear about why we are there, what our objectives are, or by what yardsticks they can judge the effectiveness of what we are doing there. Their confusion will probably have been increased by remarks such as those of Brigadier Carleton-Smith, although I agree with others that he should not be condemned for what he said, because there was some essential truth in it. As he remarked, we are not going to win this war by military means alone.
	The hon. Member for Leyton and Wanstead (Harry Cohen) has intervened a couple of times to raise the issue of talking to and negotiating with the Taliban. It is pretty much an open secret that the Afghan Government do it, that the tribal elders do it, that the Pakistanis do it and that we do it, and it is entirely right that we should. The Secretary of State said that it could not possibly be part of the solution for us to hand over any part of power to those who had not laid down arms and who were maintaining the stances that they had taken in the past, and he was entirely right to say that, but there is a world of difference between saying that and saying that we would not be willing to talk to the Taliban.
	I remember appearing on the BBC's "Question Time" on the day it emerged that the Major Government had been talking to the IRA. David Dimbleby turned to me and asked, "Are you outraged that it has emerged that the British Government are talking to the IRA?" I replied, "I am not half as outraged as I should have been if it had emerged that they were not doing so." It is entirely logical and right that such dialogues must take place if we hope ever to reach a point at which the opposing sides could be reconciled and made part of a lasting solution.
	The Secretary of State was right to say that we could not establish any form of agreement with the Taliban unless and until they agreed to renounce what they had been doing, but we cannot hope to reach that point without engaging in some sort of dialogue with them. I do not know by what means it would take place, or whether it would begin for real now or later; but there is no way we will find a lasting solution unless and until it becomes part of what we are trying to do.
	During our last defence debate a couple of weeks ago, I stressed how vital it was for us to send more helicopters to Afghanistan as part of our work there. The Government's statement yesterday about the issue of more protected vehicles was welcome, but I emphasise yet again the need for more helicopters, especially in view of the expected life of the existing helicopter fleet.
	We also need to look to the wider region. I should like to know what dialogue has taken place between the British Government and America about American incursions into Pakistani border territories. On Sunday an American drone killed 20 people in Waziristan in Pakistan, and the raids continue. It is surely an irony that the security of Pakistan may now be threatened as our allies step beyond the bounds of the original mandate. I do not seek to minimise the problems that exist in the border territories, but we need to be careful that we are not opening a can of worms in unsettling Pakistan, which is absolutely vital to British interests in that part of the world. We must proceed with enormous care.
	The Secretary of State has identified tackling the opium trade as one of our chief objectives, and he is right to do so. Given the scale of heroin addiction in Iran, I should be interested to know whether we have had any discussions with the Iranians about this. It is known to be something about which Iran has enormous concerns. I appreciate that we are significantly at odds with Iran over uranium enrichment and other matters, but it is vital—given that Iran has been involved in the west of Afghanistan—that we should have discussions with it.
	On strategy, the hon. Member for Woodspring quite rightly pointed out the folly of continuing to operate on the basis of defence planning assumptions drawn up in the context of 1998. Afghanistan and Iraq cannot be viewed just as add-ons to our general strategic outlook. They have to fit in far more fundamentally to our view of things and what we are trying to do.
	The Secretary of State has started to give a lot of thought to his new responsibilities and has identified some of the headline priorities, but before any of the key decisions can be tackled we have to go back to the drawing board over some of the big strategic issues. Some would characterise the decisions that need to be made as a tension between the priorities dictated to us by the wars of today and the longer-term threats that might emerge in other scenarios, where we have to retain a capacity to deal with what might emerge.
	Although they did not really do so today, the Conservative Front-Bench team can, when they get the bit between their teeth, wax lyrical on the threats that we might face at various points in the future. I always feel that, rather like the Old Testament, they should not be taken too literally, but neither should they be disregarded. They are absolutely right to say that we cannot concentrate entirely on the priorities of today at the expense of any consideration of these issues, but the purpose of arriving at a defence strategy is to strike a balance between them. I am not content that doing that on the basis of calculations made a decade ago is a sensible way forward.
	The right hon. Member for North-East Hampshire (Mr. Arbuthnot), the Chair of the Select Committee, asked the Secretary of State where the procurement of the new armoured vehicles fits into the FRES programme. The Secretary of State's reply was that the two had nothing to do with one another. One was funded by urgent operational requirements, the other was a long-term plan for the future. This shows precisely the problem that I am trying to illustrate. We cannot view these things in silos, as they all have to be moulded into a defence strategy that guides and governs the decisions that need to be made.
	There is a backlog of unpleasant decisions that need to be made, as I am sure the Secretary of State is now only too aware. He has been hinting in the media that it may become necessary for one of the large procurement projects to be cancelled. This will be difficult when some are rooted so firmly in the constituency of the Prime Minister and others are rooted so firmly in the constituency of the Secretary of State. Nevertheless, there are some big decisions that will have to be taken, and it is essential that they are taken in a strategic context. I have read suggestions that the joint strike fighter might be cancelled and have wondered at the sanity of that. The project is absolutely fundamental to my understanding of our procurement strategy.
	The biggest problem is the mismatch between the commitments on the one side and the resources on the other. I hope that one of our significant commitments, namely Iraq, is now winding down to a point at which one can begin to get these things back into balance. As we look forward to what the purpose of our armed forces might be, I believe that we will have to look afresh at how we co-operate with our allies. As part of that we must recognise the different amounts of weight that different NATO countries have been pulling. There will have to be an enhanced role for co-operation in defence matters at a European level.
	The Secretary of State said—and I had some sympathy with him—that his remarks on this issue were not designed to give rise to the sort of headlines that we saw about there being a European army. Let me make it perfectly clear that I would oppose the creation of a European army; it would be unthinkable for British citizens to sign straight up to a European army that was subject to a European political tier, but that is not at all what is being talked about. However, it is clear that the European members of NATO must pull more weight in the NATO partnership.
	Given the economic strength and potential of Europe, European countries have a responsibility to co-operate much more than before, not only on procurement but in a wider sense. There is no need for anyone to be alarmed about this. There are circumstances in which British troops belonging to the British armed services will find themselves operating under either a UN flag or a NATO flag, and there is no reason why, in other circumstances, they should not also operate under Europe's colours. In my view, there is no encroachment on our sovereignty in that. There is, however, a responsibility for there to be more rational planning and co-operation with our European neighbours if we are to pull our weight in the future.
	We should not be in splendid, budget-restricted and tired isolation; stronger capabilities, greater co-operation and constructive use of resources could only be of benefit to us, Europe, NATO and the world. I hope very much that, having mapped this out as a way forward, the Secretary of State will give more energy to it and ensure that it becomes a reality in future.

John Smith: I welcome the opportunity to speak, albeit briefly, in this afternoon's defence debate. I congratulate my right hon. Friend the Secretary of State on his new appointment, which I think is somewhat inspired—I am sure that prediction will be proved right in future. The fact that this is the second full defence debate in almost as many weeks is a sign of what a powerful influence he will be in the Cabinet; two Thursdays out of the past three or four have been set aside for defence, and I hope that sets a pattern for the future. I also congratulate the Opposition spokesman, the hon. Member for Woodspring (Dr. Fox), on giving a well-balanced speech, and I hope it points to what we can expect in future defence debates.
	I wish to speak on three defence policy items that I consider to be of major importance: the first is a big defence policy success; the second, unfortunately, is a defence policy failure, which I think could end up being a catastrophic one; and the third is a policy issue that I hope we can resolve this afternoon.
	The first issue is defence training. I congratulate the Government on their policy of completely transforming and rationalising defence training across all three services through the defence training rationalisation programme. I was delighted with the Department's statement three weeks ago that phase 2 and phase 3 transformation of technical training—so-called package 1—is on track and progressing well. We should get an investment decision in a few months and the final contracts signed approximately a year after that. This major and radical transformation of training will ensure that British servicemen and women have the best technical training in the world—aeronautical, electro-mechanical engineering, computer science and information technology. People will all be trained under one roof. They will be using 21st century technology and training methods, and they will be the best in the world. However, that is taking some time; 10 years will have passed by the time the scheme is up and running.
	We have already been through the same process for the officer corps, at the tri-service training academy for leadership and management training. We on the Select Committee on Defence had the privilege of visiting the defence academy at Shrivenham just the other week, and we saw at first hand the superb training that is being offered to our officers—the best in the world. It has been a huge success and an important part of the defence training rationalisation programme. We look forward to the follow-up, which is the technical training of other ranks being transformed in the same way.
	The project is so big that the construction programme alone is on a par with the London Olympic project. It is a 600-acre development programme and something like 4,500 servicemen and women will be trained there at any one time. The construction programme will create almost 2,000 jobs in the local community. The facility will provide not only the best training in the world for our servicemen and women, but because the qualifications will be civilian-recognised, it will provide a skills base for this country in some of the most prized and sought-after skills in the world. Once those men and women have been trained, they will always be in the British economy, and could be called upon in future.
	The project will amount to a huge saving in the defence training budget over the next few years. Yes, it is a £12 billion private finance initiative project over the next 25 years, and a complex and very large project on which we are well advanced, but the payback is that it will rationalise the delivery of all training across the services, avoiding duplication and creating huge economies of scale. We will actually save money for investment on the defence front line, which is where we want all the spare money to go.
	In the current difficult economic times, if the Chancellor of the Exchequer is looking for a public sector project to provide jobs, stability in the economy and investment in training for the future of this country, and to save money, I can think of none better than the defence technical academy at MOD St. Athan. [Hon. Members: "Hooray!"] I can tell that everyone agrees with me, and I would like to place that on record.
	I congratulate the Government on their approach to training and their rationalisation programme, but I now wish to raise a subject on which I do not congratulate this Government or previous Governments. It is a huge defence policy failure that could store up serious problems for us in future. We on the Defence Committee have just published our 14th report, on recruitment and training, which draws attention to the problem.
	Our policy of recruiting British ethnic minorities into the armed forces has been a complete and utter failure. In fact, there is evidence to suggest that the situation is getting worse, not better. As the Defence Committee found, the official statistics tell us that the recruitment of ethnic minorities has risen from a baseline of 1 per cent. in 1999, which is a highly suspect figure, to 6.1 per cent. by January 2008. The problem is that those figures have been fiddled. The MOD counted British ethnic minorities in 1999, but then counted Commonwealth recruits into the armed forces by 2008. Those Commonwealth recruits were already there, but they were not counted in the figure that was given in 1999. The official figure for the recruitment of ethnic minorities in this country's forces is 4.8 per cent., but I must tell the House that the more accurate figure across the three services is about 2.3 per cent.
	Why do I think that is a problem? As an ex-servicemen who will always support our armed forces, I am concerned about the effect on their reputation. As the Defence Committee pointed out, our armed forces need to reflect the society that they serve, but a bigger and bigger gap is growing between the armed forces and the society that is out there in the community, and that is dangerous. When I was a serviceman, in the 1960s, the armed forces did represent the society in which we lived—unfortunately, that meant that the forces were homophobic, by and large, class-ridden and overtly racist—but that is not the case in the 21st century. We ignore at our peril the need for the armed forces to reflect the community that they serve.

Paul Goodman: Does the hon. Gentleman agree that those efforts to recruit some ethnic minority groups may be damaged by the American incursions into Pakistan that the hon. Member for North Devon (Nick Harvey) mentioned?

John Smith: No, I do not. Unfortunately, we do not have time to go into the details of the whys and the whys not. I merely point out that the United States of America has one of the highest levels of recruitment of ethnic minorities in the world, and that is because it has a proactive policy.
	The situation is also dangerous because it restricts this country's ability to recruit and retain military personnel. If the armed forces were colour blind, we would be recruiting 20,000 more men and women into the RAF, Navy and Army, and many of the recruitment and retention problems that this country faces would largely be eradicated. Because the armed forces are not colour blind and we are recruiting only 2 per cent. instead of 10 per cent. from the ethnic minority population—

Kevan Jones: I am listening carefully to my hon. Friend. I have an unfortunate problem in that I have seen this from both sides; that includes tabling amendments to the Select Committee report on this subject. Does he recognise that the report said that one of the problems could be found within those communities themselves, and that we had to address that? I am addressing it now.

John Smith: In short, that is not the problem we face, because this situation does not occur in other countries. The largest ethnic group who could be recruited are the Afro-Caribbeans, and they do not have the same sort of pressures within their community. In the US, the other ethnic minority groups that we are talking about have the highest recruitment levels, so, clearly, this process is done differently in the US.

Brian Jenkins: My hon. Friend has identified a problem, but he has not come up with a solution. Does he feel that the detachment between the military and certain sectors of our community who have no link with and no information about the military is down to schools who do not promote it? Might that be one of the problems? Is the problem that certain sectors of our society do not have the same information on how much they could benefit from a career in the forces?

John Smith: The growing gap, which is the whole point of my raising this topic, is reflected in the fact that some schools do put up barriers. The reason is that the armed forces are in danger of becoming increasingly isolated within society, and that is a medium to long-term problem. If we do not address it now, we will have problems in the future. It is unfortunate that this is the situation facing us, because it denies many young black men and women the opportunity to escape from some of our inner-city streets and have a second chance in life, in terms of both a career opportunity and training. In other countries, especially the USA, far from not their having that opportunity, it is the principal method used by black youth to get out of the inner-city ghettoes and make their way in life, against all the odds. We are denying our young black men and women the same opportunity.

Linda Gilroy: Does my hon. Friend agree that the cadets and reserves have a particular role to play in reaching out to those communities and giving people the opportunity to enter the armed services?

John Smith: I do, indeed, and that possibility should be explored further.
	For 10 years those at senior levels of the Government and the military have tried to address this issue, but we have failed. The time has come to put in place within the armed forces—a disciplined, authoritarian, structured organisation—a command responsibility, as they have done in the United States, that recognises that command success will be determined by an ability to recruit from across the community.
	Finally, I would like to raise a point about the 200 residents in my constituency who have just been billed for nearly £1,000 in water charges back-dated five years—this just before Christmas. They are predominantly low and modest-income families on the west camp at MOD St. Athan living in the former married quarters—they are now first-time buys for young families. Because of MOD bureaucracy, those people have received bills dating from five years ago that have landed on their doorsteps completely unexpectedly, and I hope that Ministers will waive those payments.

James Arbuthnot: It is a great pleasure to follow the hon. Member for Vale of Glamorgan (John Smith) who, as always, made an excellent speech.
	I welcome this debate. Although it can seem to some that such debates come along like buses—three at a time—this is in fact a perfect time as we have a new ministerial team. Earlier, I welcomed the arrival of the two new Under-Secretaries of State for Defence, the hon. Members for Grantham and Stamford (Mr. Davies) and for North Durham (Mr. Jones), but I did not welcome the Secretary of State's arrival, which was an oversight. His arrival has been welcomed by the armed forces, because of his defence knowledge and constituency interest. His appointment is a very good thing. I also pay tribute to the Secretary of State's predecessor, the right hon. Member for Kilmarnock and Loudoun (Des Browne). From the beginning, when he was faced with the Lynx crash in Basra, which he handled with huge sensitivity, understanding and assiduity, he proved himself to be a good Secretary of State for Defence. We will miss him.
	Several hon. Members wish to speak, and I have been treated with great indulgence by your calling me, Madam Deputy Speaker—because of my position, rather than my quality, I think—so I shall make only one point. I shall take a little time to make it, but probably not as much as half of the 12 minutes available to each of us.
	In the United Kingdom, the defence world and Europe as a whole, there is a crisis of understanding about defence. People are talking from different viewpoints without listening to each other, or understanding or hearing what other people say. The armed forces say, "We need this piece of equipment. Other armed forces have it. For example, the Americans have had explosive suppressant foam in the wings of their aircraft since the 1960s. If you send us into battle without such equipment, you will put us at an unacceptable risk. We will therefore be faced with the choice of going in under-equipped or of saying no to the Armed Forces Minister. It is against our ethos and training to do that, so faced with the choice of being put at risk, or saying no, we are leaving the armed forces." That is the position that our armed forces say that they find themselves in.
	The Treasury says, "Well, what do you want? Do you want a completely unlimited budget? There is nobody—no individual, no Department—that has an unlimited budget. Do you want us, the Treasury, to make your choices for you? Obviously not, and frankly we would feel more accommodating towards you—you would be more persuasive—if you spent the money better that we do give you. We do not understand what the armed forces are asking for in this case."
	The industry says, "We would like to understand what the Ministry of Defence is doing, but for the last year at least there has been no real discussion between the Ministry of Defence and industry about what the Ministry is going to do. The Ministry of Defence has been told, first, that there is to be no bad news and, secondly, that there is to be no more money. Those two things are incompatible."
	The people of this country say, "We do not understand what you are doing in Afghanistan or Iraq. Although we think that on the whole the armed forces are badly treated, we do not want to pay more money to them if they are carrying out projects that we do not understand or support, particularly if that money is to come from our schools and hospitals in order to prop up a corrupt Government in some country that we have never been to. We do not understand what they are doing."
	That crisis of understanding has to be addressed, and it has to be addressed by the new ministerial team. There are people who are to blame for having failed to inspire the public by what we are doing. There are Treasury people who are to blame for treating matters to do with the armed forces as financial, when they are inspirational. A military band cannot be treated as something that can be reduced to pounds, shillings or pence or that can be described in figures. It is a matter of inspiration, and for each band that is cut the military understands that fact but the Treasury does not.
	The people are to blame, too, because they have forgotten what Pericles said in the Peloponnesian war—if they ever knew. He said that one cannot have happiness without freedom, and one cannot have freedom without courage. He probably said that in some language other than English, but it is crucial and necessary for the people to remember it as they look forward to demanding that a higher proportion of our gross domestic product should go to defence. It is quite wrong that we spend the lowest proportion of our GDP on defence that we have spent since the early 1930s. If we reduce defence spending to such a level, we invite war. It invites the contempt of our enemies and invites them to believe that we no longer believe in our own values. That is where we are.
	It is for the ministerial team to inspire the country with a vision of what we are doing in Afghanistan and Iraq, of why we are there and of why we need to support our armed forces. At the moment, that is not happening.

Robert Key: I am delighted to follow my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot), who has made the most remarkable speech that I have heard in a defence debate for a long time. I would only add that I, too, believe passionately that we should reconnect with our constituents to point out to them that even in these straitened times we need to recognise that our future prosperity, our standard of living and our quality of life all depend on recognising what our freedom stands for. If we are to continue to trade globally with the rest of the world, to import and export goods and services, and to do more than 90 per cent. of it by sea and only a tiny minority by air, we must, as a matter of necessity, still be able to project force around the globe.
	We have reached a crossroads, as my right hon. Friend pointed out. We will either be a global force to be reckoned with, or we will not. If we are not, we will fall back on a group of countries that currently call themselves members of NATO, or perhaps on another relationship within the European Union. We cannot have it both ways: either we address the issue of the proportion of our national spending that goes on defence, and increase it—I would like to double it, as I have been saying for many years, to the distress of my party and the disbelief of the Labour party—or we will have to sit back and decline gently over the coming generations.
	I believe passionately, however, that we do not really have a choice, because our people demand that their standard of living does not decline. Nor are they willing to see their ideas of what Britain is all about written off. Therefore, as my right hon. Friend so vividly explained, we must give them a vision and a far clearer explanation of what we are doing about defence in the world. We also have to explain that the goods and services that they buy in the shops depend, ultimately, on the freedom to trade globally, on keeping the sea lanes open, and on keeping the security of our shores under constant surveillance, using technology that they are not used to and cannot really understand. How many of our constituents are distressed by what they perceive as the decline of what used to be called Customs and Excise, now Her Majesty's Revenue and Customs? They say, "There aren't any Customs cutters floating around our shores any more." That is history; we now do things differently, and I have to accept that.
	People are increasingly concerned about the way in which our defence policy, as applied to our personnel, does not provide the services that our constituents expect. The remarkable reaction right across the United Kingdom to Help for Heroes has made us all sit up and wonder why that extraordinary organisation, which I am proud to say originates from my constituency, has caught the imagination of the British people. It is because the British people have suddenly woken up, and say, "Well, we may not understand what the armed forces are doing, and we don't like seeing on our television screens what they're doing, and what is being done to them in Afghanistan, Iraq or many other parts of the world"—there are, in fact, some 4,000 different units of the British military all around the world—"but we recognise that when they come home, they should expect and receive better."
	That is why I am particularly anxious about how we treat returning service personnel, medically and mentally. I salute the progress that the Ministry of Defence has made in addressing those issues. The Defence Committee produced a report earlier this year on how we look after our service personnel and their families, medically. However, we need to go further. We have, of course, visited Headley Court and Combat Stress to see what they do, but there is something else that we need to do: we need to encourage Ministers to provide all the necessary resources, for example to the King's Centre for Military Health Research of King's college, London. It does incredibly good work, which it has been publishing since 2006. However, it still has a long way to go.
	There is a remarkable project, which I hope Ministers will continue to support, called the trauma risk management, or TRiM, project for post-conflict trauma, depression and stress training. The system operates as a proactive peer group and mentoring and support system that helps people to identify when those in the services are at risk, and the symptoms that they should recognise. The allocated budget for all stress management training within all the armed forces stands at about £1 million a year, which is not nearly enough. It is easy for me to say that we must spend more, but this is a very important matter, and in view of the anxiety about it, expressed only today in the national press, I hope that Ministers will consider what should be done.
	Another issue that we should take as part and parcel of the question of trying to ensure that the public understand more about what it means to serve in Her Majesty's forces is how we treat them with regard to their right to vote. For many years we have been saying that Her Majesty's forces do not have as high a level of voter registration as we think they should, and this month the Electoral Commission has described the way in which our forces are under-registered. It points out that only about two thirds of Her Majesty's forces are registered to vote, and it is running campaigns, which I welcome. I hope that Ministers will be encouraged to work ever more closely with the Electoral Commission to ensure that in the annual campaign that is beginning this month, through unit registration officers and Ministry of Defence publicity, no effort is spared to ensure that our service voters have the service that they deserve. It is also important to recognise that registering as an overseas voter is not always the answer. Rather the answer for all service personnel is to register as service voters because they need register only every three years instead of every year.

Lembit �pik: I understand that, unlike service personnel from other countries such as America, our service personnel do not have the opportunity to vote in a ballot box when they are serving overseas. They feel that having to vote by proxy means that they are effectively denied the democratic rights that those whom they are fighting alongside are granted. Does the hon. Gentleman agree that the Government should look into what appears to be an injustice?

Robert Key: I am glad that the hon. Gentleman has popped into our debate, which has been very important indeed.  [Laughter.] Seriously, I am delighted that he is here. But it is not a question of how our service personnel vote, but of how they get on to the register. The voting that is recommended is by proxy. The Electoral Commission, the Ministry of Defence and my constituents in the armed services say that that is the best way. Nevertheless, the hon. Gentleman makes an important point.
	Another matter on which I want, unashamedly, to press Ministers concerns the future of land forces headquarters. When it was mooted some years ago now that the Army should move its land headquarters from Erskine barracks in Wilton, which also happens to be in my constituency, to redundant buildings in Andover, there was much sucking of teeth, as the Minister would imagine. It was made plain from the start that the British Army land headquarters should be somewhere special, somewhere superb, somewhere that could be an expression of all that is best about the military tradition. Therefore, given that the headquarters land was in premises that had been taken over from the old southern command formed in the second world war and in buildings that were incrementally added to and are now pretty tatty, it was considered appropriate to move into new buildingsnot over-the-top buildings; nothing approaching the grandeur and luxury of the Ministry of Defence main building; nothing like that for the people who do the fighting for our country, oh no. But there was at least the assurance that the new premises would be purpose built and appropriate. Not a bit of it. In a parliamentary answer last week, it was finally decided that the headquarters should be in the old buildings in Andover. They would be tarted up a bit with the odd lick of paint and bit of new carpeting here and there, no doubt, and that is fine, but it is a great disappointment. I share the Army's disappointment at the way in which this aspiration for something visionary for the future of the headquarters is now no more.
	I should also like to draw the attention of the House to the problems that arise when military establishments are disposed of. That issue interfaces with domestic policy just as importantly as it does with defence policy. In the case of Erskine barracks, it means moving out 1,200 jobs and the military eventually vacating a large site, which will be sold. There is a disjunction between the Ministry of Defence and the civilian authorities. Only yesterday I spoke to officers in my planning authority who are working happily, closely and harmoniously with Ministry of Defence officials in what is called the Wilton taskforce, which is led by the Defence Estates. The problem is a lack of certainty and a fuzziness about the whole thing. Above all, Defence Estates has no consistent point of contact with the planning authority at a time when the planning authority is changing from a district council and county council to one unitary authority; I would have thought it in the interests of the Ministry of Defence that there should be continuity. At Defence Estates there is no consistent person with whom the planning officers can talk, at a time when they have to reinvent the existing local plan, which will expire, and when a process is in train for setting up a new plan.
	Such issues do not sound like grand national defence policy but they are important to the morale of the people from all three services in Afghanistan, Iraq and all around the rest of the world. They need to know that we are at least looking after their domestic and administrative interests and ensuring that they can be proud of the offices in which they work and the services that we provide. In that way, they can be part of a democratic process that maintains their freedom and our freedom.

Linda Gilroy: It is only three weeks since our last defence debate, during which the Under-Secretary of State for Defence, my hon. Friend the Member for North Durham (Mr. Jones), said that there was no equivocation about the Government's commitment to Devonport. I make no apology for beginning with some local issues, although I want to take up some of the points made by the two previous speakers, with whom I have the honour of serving on the Defence Committee.
	I suspect that in the coming weeks redundancies at Devonport Royal Dockyard will be announced. The redundancies have been spoken of for about three years. Given that the 24/7 media tend to accentuate every story by repeating it almost every quarter of an hour, sometimes for several days, the fact that the redundancies have been expected for such a long time has tended to make it sound as if they are happening over and again. Nevertheless, when they come, they will, of course, be a source of deep regret and play into the ongoing concerns of my constituents.
	Earlier this afternoon, my hon. Friend the Member for Plymouth, Devonport (Alison Seabeck) and I discussed the death by a thousand cuts of Devonport naval base and dockyard with the regional Minister.  [Interruption.] I see my right hon. Friend the Minister for the Armed Forces sitting, as always, with great patience as he hears that such stories are ongoing. We know that Bulwark, Albion and Westminster will keep our workers in the dockyard busy for several years and that there was a huge 150 million investment to enable the important Astute submarine maintenance work in Devonport to continue.
	There are, of course, peaks in the sort of work that is undertaken at our dockyard, and they are associated with the intense work on the submarines. Obviously, those peaks occur alongside the troughs in between. Filling those troughs is very important to the people who earn their living through this work. In recent weeks, Babcock Marine decided that it would no longer continue with work on some prestigious luxury boats that had been part of the in-fill work that kept the expert skills of the people who work on the submarines honed.
	Yesterday, following my question at Prime Minister's Question Time, I was pleased to hear the announcement about the 700-million vehicles programme, part of which will be for further purchases of the Jackal vehiclea great success story that we have talked about in previous debates. The programme will not automatically come to Devonport, but I cannot imagine that anywhere else is as well positioned to compete for it. When we met my right hon. Friend the Minister for the Armed Forces a few months ago, he assured us that he would press to obtain the clarity to which my right hon. Friend the Secretary of State referred when he said that he hoped soon to make some important procurement announcements.
	There is often confusion between the roles of Devonport dockyard and the naval base. Of course, the prospects of both are closely tied together. Last week, I was pleased to be able to attend, as part of the armed forces parliamentary scheme, the staff course at Shrivenham defence academy, where for three days we discussed maritime policy and doctrine alongside officers who are on a year-long course preparatory to taking on their first command posts. That helped me to get a deeper and broader picture of the range of tasks and the flexibility of the role of the Royal Navy, and the centrality of amphibious warfare, for which we hope to become the centre of excellence in Devonport.
	The right hon. Member for North-East Hampshire (Mr. Arbuthnot), who chairs the Defence Committee, referred to a crisis of understanding. One of the things that I gained a deeper understanding of was exactly what people mean when they refer to sea blindness and maritime blindness. That operates on several levels, one of which relates to the general public.
	When our deployments in Afghanistan and Iraq are shown on television, they appear broadly to be land deployments to which the Navy is not at all central, so it ends up being sidelined. Nothing could be further from the truth, but that puts at risk its interests in relation to all the tensions involved in the defence budget. In Defence questions on Monday, I requested information about the number of Royal Navy personnel who are currently deployed in Afghanistan. The answer will probably come as quite a surprise.
	In the battle of arguments between land, air and sea forces for different procurement programmes, the Royal Navy is put in a peculiar position whereby the centrality of its role in our joint expeditionary force capabilities becomes lost. My experience last week suggests that all the platforms together, including the carriers and the amphibious vessels, are there to project, support and protect our armed forcesthere could be nothing more central to what we need to do to meet the risks of today and tomorrow.
	Various hon. Members referred to the future carrier, which will enhance that amphibious capability to project, support and protect as a central plank of the expeditionary force that we need to deal with uncertain future threats. Some have argued that we need a White Paper to bring all this together. In addition to the fact that that would delay things, which would be dangerous, I understand that the basic assumptions underpinning the last White Paperthe strategic defence reviewhave been reviewed and found to hold true. There is a case to clarify and update what the right hon. Member for North-East Hampshire referred to as a crisis of understanding. I hope that some means of drawing on recent important studies can be found.
	I want to mention two further issues. First, I acknowledge the work in the report of the Under-Secretary of State, my hon. Friend the Member for Grantham and Stamford (Mr. Davies), on national recognition, and the Government response, which, among other things, confirms that we will have the first British armed forces and veterans day on 27 June next year. Work is ongoing to ensure that the day is in tune with national sentiment and to ensure that the scale and nature of the event do not unduly burden the armed forces, which is an important consideration.
	Secondly, I particularly welcome the Under-Secretary, my hon. Friend the Member for North Durham, who this morning welcomed two remarkable veteranstwo of the 50 veterans who have had life-size portraits painted by local artist Peter Blackler, telling the story from the first world war to the most recent deployments. I hope that a role can be found for that sort of project. I welcome the fact that prints of the two portraits are to be hung in the Ministry of Defence. Such projects, especially when they involve young people, are an important part of how we help our communities that are less familiar with the armed services than those represented by most of us here today to understand the role of yesterday's and today's armed forces, and the needs of veterans of more recent deployments.
	I conclude with an issue arising from the Government's response to the recent report of the Defence Committee on recruitment and retention. I was particularly disappointed by the Government's response to our recommendation that they should, as soon as possible, carefully consider dealing with the differing retirement ages in the armed services, which has a particular effect on the senior ranks. Because people must have two years' remaining service in order be able to apply for some positions, those who have an earlier retirement datemostly Marines, some of whom have the most important experience from recent deploymentcannot apply for posts that are open to all services. That cannot be right. It is not sensible to deny individuals that opportunity, and it is not sensible for the MOD not to have the benefit of those senior officers' experience.

Bob Russell: This morning in Colchester there was a regimental service for 2 Para. The final members returned on Sunday, and tribute was paid to the nine members of the battalion, along with those attached to itanother fourwho died. The 16 Air Assault Brigade suffered 32 deaths and 170 serious injuries. I know that the House will rejoice for those who returned and feel great sadness for those who did not.
	I am concerned about the future of the British Army. To discover from parliamentary questions that 10 per cent. of the British Army is not British is worrying. At some point, we need to address the reason for young British men and women's not joining Her Majesty's armed forces in the numbers that we would wish. Clearly, it has something to do with the attractionfinancial and otherwiseof the package, which needs re-examining. However, I heard at a function yesterday that 37 per cent. of recruits drop out before they can become fully fledged members of Her Majesty's armed forces. That says something about the physical fitness, determination and aspirations of our young people. It is little wonder that there is a recruitment problem if many of those who join do not make it.
	Let us consider retention. I pay tribute to the Government for the new barracks that have been provided in my constituency and elsewhere. I am not a fan of the private finance initiative, but Merville barracks, with their accommodation for the single soldier, are a great success. However, the accommodation for those in married quarters is deplorable. The Secretary of State mentioned investmentI believe that the figure was 8 billionover the next few years. I seek clarification, but I am sure that a large chunk of that is rent for properties that the Ministry of Defence once owned and that the previous Government sold off at ludicrously low prices. In the past 10 years, the rent paid for properties that were once owned is less than what the Conservative Government got in capital receipts.
	The story gets worse. I ask the Minister to confirm that the investment in married quarters is from the public purse to private properties, enhancing even further the value of houses that Annington Homes owns. When it sells them off, at a thumping great profit, the public purse has enhanced their value and increased that company's profits. That cannot be right, and I hope that one day a Conservative Member will have the grace to admit that the public were ripped off in that privatisation and that our military families are suffering as a consequence. In my constituency, more than 200 Army houses stand empty, for which the public purse pays approximately 700,000 a year. That is a waste and an absolute disgrace.
	For the married soldier, his children's education is of the greatest importance. I urge the Government to examine closely the Defence Committee's excellent recent report and to look back to the Adjournment debate that I secured on the subject almost a decade ago. The lessons that should have been learned then have still not been acted upon.
	I congratulate the Government on today's written statement on the inquests and on trying to speed up the process. I wonder whether the Minister can tell us a little more about the progress in the defence inquests unit. The written statement suggests that things are moving, but can the Minister give us any idea of when the process of tackling the backlog will be completed?
	The hon. Member for Thurrock (Andrew Mackinlay) referred to the Gurkhas. In case hon. Members did not know, I can report that the Select Committee on Home Affairs will hold a special one-day hearing on Tuesday. I hope that the Committee will recommend that the Government follow both the spirit and the legal interpretation of the High Court decision, which is that Gurkhas who retired before 1997 should be allowed to live in this country should they so wish. The Government made the right move in allowing Gurkhas retiring after 1997 and thereafter to do so, so the principle has been accepted. One hopes that the Government will now go further and accept the spirit of that ruling. Also, there is a ten-minute Bill dealing with the issue before the House, which, I can modestly say, I introduced. I hope that the sentiments behind that Bill will find their way into the next Queen's Speech.
	I realise that many other hon. Members wish to speak, so I shall conclude. I, too, pay tribute to the Royal British Legion and all the other charities involved in providing additional help and encouragement. I passionately believe that we need that community involvement throughout the country, so that there is a feeling of ownership and a feeling that people have something to contribute. We are all wearing poppies as a visible sign of that. I have no more to add and I appreciate that others wish to speak, so I conclude on that point.

Ann Winterton: I too shall try to be brief, because I know that so many others wish to contribute to this reasonably wide-ranging defence debate.
	In spite of the current economic difficulties, now is not the time to cut the military budget, especially when times are so uncertain and when the very stability of nations and the civilised western world is being called into question. With the recession and so much of the budget already committed for future military projects, even if we take into account yesterday's very welcome news of the 700 million protected mobility project, my biggest fear is that the Army will lose out. Yet the Army is the very service with the hard-won experience and expertise that the UK needs most, if we bear in mind the commitments that the Government have made in committing our forces to two war zones.
	I regret that I was unable to be present yesterday to listen toor, even better, to contribute tothe debate in Westminster Hall on Government strategy and objectives in Afghanistan. Having read  Hansard this morning, I support the contribution made to that debate by my hon. Friend the Member for Bournemouth, East (Mr. Ellwood), who has first-hand experience of the problems faced there. I have made the point before that I do not believe that we will succeed in Afghanistan while security, reconstruction and development fall under two commands. The whole project should be under one command, preferably that of the Army, for success to be achieved. If the objective is not achieved, the overstretched and under-resourced military will be placed in an impossible position, with, I regret to say, further loss of life.
	I have always given credit where credit is due to those responsible for transforming the equipment and fighting ability of the Army. As in the past, I commend those responsible for the introduction of the Talisman project, including the Buffalo mine-clearing vehicle. I first raised the issue in the House exactly three years ago, so it is gratifying to know that minds in the MOD have been changed in the meantime on the usefulness and life-saving potential of the Buffalo.
	However, I was intrigued to read a report today by the director of equipment capability, who said:
	The Talisman system is based around three vehicles
	the Mastiff, which we know about, the Buffalo, which I have mentioned, and the high-mobility engineer excavator, which I understand is to be built by JCB. However, what has happened to the Caterpillar DV104 armoured heavy wheeled tractors, 25 of which were procured at a cost of 14 million, but which are now being sold for less than 4.5 million? I believe that six of them were delivered as recently as 2001, and that they remain unused. I would have thought that those vehicles could be of some use to the Government in Afghanistan, for mine clearing, road buildingyou name it. My hon. Friend the Member for Salisbury (Robert Key) mentioned that he would like to spend twice as much on defenceas, indeed, we all wouldbut we have to ask where the wastage is occurring, and whether that money would be better spent on the vehicles that our armed services now need.
	One of the areas in which the Ministry of Defence is most uncommitted at present is the category of medium-weight vehicles. I appreciate that they are part of the FRES package, which was mentioned by the Chairman of the Select Committee earlier, and I admit to having been critical in the past about the original concept. However, the Mastiff and Ridgeback design, which involves blast deflection rather than blast absorption, must be supplemented by more vehicles of that type. The Army needs a medium-weight vehicle that is ready to combat the difficulties that it could face from disorder in parts of the world as a result of the present worldwide financial and economic difficulties, and the terrorist threat that might follow in its wake.
	Another need crying out for urgent attention is the provision of helicopters. This has also been mentioned earlier in the debate. I appreciate that, with the recession and the need to reduce unemployment, it will be tempting for the Government to insist on a home-grown product. We should, however, never deny our forces the helicopter capability that they urgently need, and which can be purchased off the shelf, even second hand. There are helicopters available that already have a proven track record in theatre.
	The Royal Navy will have its two carriers, although whether there will be any aircraft to go on them is another matter. It will also have the Type 45 destroyers and the Astute submarines. The Royal Air Force has its Eurofighter and, in future, it will have the A400M airlift aircraft. But where is the ring-fenced finance for the key element of the future Army structure, which was based on the medium-weight vehicle?
	I mean no disrespect to the Royal Navy and the Royal Air Force, which are both excellent in the roles that they undertake, when I say that it is the Army that is at present bearing the brunt of operations in two theatres, one of which is particularly difficult. I trust, therefore, that the Minister and Her Majesty's Opposition will make an unequivocal commitment to seeing the future Army structure through, so that, at the very least, the Army has the ability to fulfil its present role, to respond whenever it is called upon to keep order and stability throughout the world, and to defend the best interests of the United Kingdom.
	In what we all recognise will be a tight military financial budget, the last thing that the nation would expect is for the Army proportionately to come near the bottom of the available funding league, while being expected to continue to carry the greatest burden. The British people know what sacrifices it has already made, and continues to make. They salute the courage and determination of our fighting forces, supported as they are by their families and friends, to whom we are also grateful.

Adam Holloway: I have been so impressed by the brevity of some of the speeches I have heard today that it has rendered me almost unable to speak. Members will be relieved to hear, therefore, that I am going to throw away the speech that I had prepared and will just make a couple of points. We need to consider having some sort of defence policy, and I would have spoken about this at much greater length if my voice were not in this condition.
	Before we pat ourselves on the back too much about Iraq, let us remember that the biggest single consequence of the invasion of that country is that, in the minds of hundreds of millions of people in the middle east, a crazed extremist called Osama bin Laden asserted that the Muslim umma was under attack by western countries that wanted to cause problems in the middle east. To my mind, our invasion of that country was completely unnecessary and, for hundreds of millions of people, it has given his words resonance. That is going to be the most lasting consequence of our engagement in Iraq.
	We need also a defence policy that will stop us having another strategic failure after Iraq in Afghanistan. I went to Afghanistan a couple of weeks ago with my right hon. Friend the Member for Haltemprice and Howden (David Davis) and there is a considerable amount of disillusion about the situation there. At the moment, we are certainly not winningand I could put it another way if the House wanted me to. Furthermore, by focusing almost exclusively on the military effect, we are in danger of losing what has become known as the global war on terror. The consequences of all that are enormously seriously.
	I shall not bang on, but I should like to read what someone said in 1850 about Britain's engagement in the first Afghan war; it applies equally to the whole global war on terror. John Kaye said:
	Throughout the entire period of British connection with Afghanistan a strange moral blindness clouded the vision of our statesmen: they saw only the natural, inevitable results of their own measuresand forgot that those measures were the dragon's teeth from which sprang-up armed men.

Angus Robertson: It is an honour to follow the hon. and gallant Member for Gravesham (Mr. Holloway). I am only sorry that his voice was failing him, because he was making a powerful argument. I look forward to the next opportunity to hear what he has to say in greater detail.
	I am pleased to take part in the debate. Through the Minister of State, I want to give a warm welcome on behalf of the Scottish National party and Plaid Cymru to his new colleagues in the Ministry of Defence team. I also want to put on the record a genuine and warm tribute to the Secretary of State's predecessor, the right hon. Member for Kilmarnock and Loudoun (Des Browne). Those who understand Scottish politics know that it is a pretty competitive field between my party and his, not least because we won his seat last year in the Scottish Parliament elections. However, I always had a straight and helpful information flow in my relationship with him, which is important bearing in mind that I represent the largest group of service personnel in Scotland, with both RAF Kinloss and RAF Lossiemouth in the Moray constituency, and that there is a strong Army tradition with the Highlanders and other regiments such as the Royal Scots Dragoon Guards. For that reason, it is not a surprise that the largest constituency veterans day event in 2008 was in Moray.
	It is important to reflect on what the shadow Secretary of State for Defence, the hon. Member for Woodspring (Dr. Fox), said about support for the troops. We should put it on the record, as the hon. Member for North Devon (Nick Harvey) did, that support for our troops cuts across parties and our opinions on the operations on which they are sent. There are those of us who have passionately opposed the likes of the Iraq mission who will not avoidnor would we ever seek to avoidgiving our unwavering support to our troops and the work that they do.
	The four substantial issues that I want to raise are Iraq, Afghanistan, matters relating to veterans' affairs and Trident. I had the good fortune last week to visit the Iraq mission in Basra and spent a lot of valuable time with the British armed forces there. I was briefed about their work. Having seen what I think is universally acknowledged to be a successful transitional operation involving UK military officers advising Iraqi opposite numbers in the 14th division, I am glad to be able to put it on the record that our armed forces are doing tremendous work. The more who know about it, the better. I am pleased to report back to those hon. Members who have not had the opportunity to go to Iraq to see the work of our armed forces that it is extremely effective. However, I left with one very big concern relating to civilian reconstruction.
	Many people are working extremely hard in the provincial reconstruction teams, not least the local team leader Keith MacKiggan, who, with officers from the Royal Navy and colleagues from the Netherlands and elsewhere, is helping the municipal authoritieswhich, sadly, are extremely corrupt and ineffectiveto re-establish key services such as water and electricity supply, sewerage, and rubbish disposal. It concerned me that one of the most senior officers briefing us, who had served around the world, described the living conditions in large parts of Basra city, notably al-Hayyaniyah, as the worst that he had experienced anywhere at any time. It concerns menotwithstanding my wish to see UK armed forces withdrawn from Iraq as quickly as possiblethat part of the UK legacy will unfortunately be a continuation of that intolerable situation. I would welcome anything that the ministerial team can do to encourage their colleagues in the Department for International Development and the Foreign Office to ensure that those problems are overcome.
	One of the great advantages of such visitsin this case it was organised very ably by Captain Helen Falconerwas that we had the opportunity to speak to service personnel of all ranks from throughout the United Kingdom. As one would expect, as there are so many service personnel from Moray, I met a lot of them in Basra. The one message that I received consistently was that they are concerned about the time that it takes them to travel home on leave and that that time is effectively deducted from their overall leave period. Young men from Buckie and Orkney, serving with the Royal Scots Dragoon Guards and the Highlanders, explained that they were given 14 days' leave from intense service on the front, and that it took them three days to travel home and three to travel back, effectively halving their leave time. I do not consider that acceptable, and I hope that the Ministry of Defence will re-examine its rules pertaining to the calculation of travel time for our serving personnel.
	Let me now turn to the subject of Afghanistan, not least because of the biggest single loss of life among the UK armed forces there. I pay tribute to the 14 personnel who died aboard Nimrod XV230, which was based at RAF Kinloss, and to their families. I was pleased to receive the Secretary of State's assurances, in reply to an intervention from me at the beginning of the debate, about the serviceability of the Nimrod fleet as well as the maintaining of the safety focus, which is extremely important. I shall return to that laterI hope that the Minister of State shares my concern about some ongoing serviceability issuesbut I first want to say something about the broader aspects of the Afghanistan mission.
	We need to look closely at our current position, as other countries are doing. I understand that the United States national intelligence estimate on Afghanistan, prepared by the United States 16 intelligence agencies, is set to highlight what they describe as harsh conclusions to the current strategy. It seems to me that we have limited breathing space for a major rethink over the winter months, when fighting subsides and a new United States President reviews his options. It is our brave troops who are literally on the front lines as the situation deteriorates. The Taliban have regrouped, the heroin trade is flourishing, and we are backing a Government with significant corruption problems. Meanwhile, too many ordinary Afghans are seeing precious little reconstruction and development,
	It should be obvious to anyone with even a cursory understanding of Afghan history that this is a recipe for disaster. We need a major rethink now. Sadly, the United Kingdom misspent most of the opportunity that it had to make progress in Afghanistan by becoming embroiled in Iraq. The SNP and Plaid Cymru believe that the time has come to look at all the options before it is too late.
	My time is running down, but there are two wider points that I want to make that are important. Defence policy, from our perspective, is sadly still decided in this place, but many of the attendant support mechanisms and the charity sector dealing with military matters are devolved or self-standing. That is visible by those of us who have decided to wear Scottish poppies; some may not be aware that they are doing so. I am pleased that colleagues from England are supporting Poppyscotland here today.
	I am pleased also that one of the first acts of the Under-Secretary of State for Defence, the hon. Member for North Durham (Mr. Jones), who is responsible for veterans in the UK Defence Ministry, was to travel to Edinburgh last week to meet Stewart Maxwell, the SNP Minister in the Scottish Government with responsibility for such matters. I am pleased that the UK Minister was able to learn about the tremendous progress that has been made in the past 18 months. For the first time in Scotland since devolution we have a Scottish Government who have set out a programme for assisting veterans across Scotland. There has been a whole series of improvements to the situation inherited from the Labour and Liberal Democrat Administration in Scotland who, sadly, did not have such a focused policy.
	My last point is about Trident. The Secretary of State was absolutely right to say that one of the universal principles that guide the policy perspectives of anyone in a democracy is that of standards of democracy and consent. I found it slightly jarring to contrast those comments with one of his first visits in post to Faslane, an excellent facility that will be a tremendous base for conventional naval forces in Scotland. The Secretary of State chose to travel to Faslane and to criticise those of us who do not want Scotland to be home to a system of weapons of mass destruction. It is not just the SNP that believes that; the Scottish Churches, the Scottish TUC, the majority of voters and the majority of Labour voters in Scotland believe it. I hope that the Secretary of State, who is not present now, takes the opportunity to reflect on the fact that when he talks about democratic consent he should apply that to public opinion in Scotland.
	We are debating defence matters in the run-up to Remembrance Sunday. It is important for all those servicemen and women who may be watching or reading what we discuss today that they understand that our support for them is not dependent on our support of Government policy or on the constitutional arrangements within the UK. The most important message to all our servicemen and women, and to all the charities that support them and their families, is that we salute them all.

Bernard Jenkin: We respect the Scottish National party's respect for our armed service men and women. We have rather less respect for its defence policy. I seem to recall that it wanted the economic policy of Iceland until fairly recently; perhaps they want a similar defence policy for Scotland. I do not think that the Scottish people, on reflection, would choose that.
	I dedicate my remarks to 2 Para, who are holding their service of remembrance for fallen comrades today in Colchester.
	The first issue we have to face is that the Government no longer have a defence policy. The writing was on the wall for years. The mismatch between commitments and resources has become progressively worse. The publication of the national security strategy in March marked a tipping point. It stated the Government's determination to
	shift the overall balance of defence procurement towards support of current operations.
	That was an implicit admission that, after the 2008 three-year spending review, the MOD could no longer pretend to make ends meet. The Government can no longer maintain all the current commitments alongside the maintenance of the capabilities set out in the strategic defence review to keep the UK at the top table of military nations in the future. The Government's defence policy is collapsing. This follows the 10 years since the SDR, during which the armed forces have been increasingly underfunded, leaving an ever-widening gap which can be bridged only by continuing the run-down of manpower and extending the delays in orders for new equipmentwith all the extra costs involved in thatand by the cancellation of training not directly relevant to the present counter-insurgency campaigns.
	The armed forces have just to keep making do, and they do so brilliantly, with the prowess, skill at arms, bravery and dignity that is their hallmark. However, they have been operating beyond the Ministry of Defence's defence planning assumptions for a period longer than the second world war. Such sustained overstretch means that, for example, half the new British Army officers deployed on operations have never done their live fire and manoeuvre exercise at the BATUSBritish Army training unit Suffieldtraining area in Canada, which used to be a prerequisite. It also means that the term pinch point trades, which used to apply to a few specialist jobs in the services where there was a shortage of trained people, is now applied to the infantry as a whole. In order to meet the Government's own targets for concurrencythat is, maintaining harmony guidelinesthe number of infantry battalions would have to be increased by 10, from 39 to 49.
	Overstretch has been a deliberate Government policy; they have consciously run a foreign policy dependent upon the force of arms whose ambitions have outstripped the sustainable capability of the armed forces. Moreover, that looks set to continue. Whatever capacity is withdrawn from Iraq over the coming months looks likely to be almost immediately redeployed in Afghanistan as part of a US-led military surge. I do not necessarily oppose that policy, and I have no doubt that the armed forces can continue to deliver, but only in the short term, as the Chief of the Defence Staff himself has said. This sustained period of overstretch is having dire consequences, which we in Parliament, who are elected to be guardians of the long-term national interest and the welfare of those who would give their lives for us, should regard as completely unacceptable.
	The first consequence is military. I have been advised that the long-term attrition on people and equipment means that the MOD now privately estimates that even if it were to withdraw from all current operations immediately, the armed forces could not fully recuperate before at least 2017. That means that we are close to breaking the Armya notion introduced to the debate on defence not by an Opposition MP, but by the Chief of the General Staff. The same applies in different ways to the other two services.
	The second consequence is the human reality of this military exhaustion. Why should men and women fight and risk their lives? They do so because they believe in what they are asked to fight for, and they believe that their country will look after them and those they love. I have looked into the faces of exhausted helicopter pilots, listened to soldiers back home who are haunted by their experiences, heard sailors who have cancelled their leave or their training and left their families to be with their ship on operations, and shared the grief with bereaved families. We must not take it for granted that the men and women of the armed forces will always be there when we need them. The steady flow of those leaving early is testimony to the strain on them, yet it has become an insidious part of the Government's defence policy consciously and cynically to exploit the extraordinary good will and resilience of these men and women. It cannot go on for much longer. I appreciate that the Government have begun to address questions around the military covenant, but we should keep reminding ourselves that this aspect of their exploitation of the good will of our servicemen and women is completely morally indefensible.
	There is a third consequence, which is yet more serious and profound. The national security strategy and the Secretary of State's hint to  The Sunday Times that a big programme would have to be cut both demonstrate that there is now a deliberate act to compromise our nation's long-term security as defined by the SDR, which set out all the essential things we need, simply for lack for funds. The terrible dilemma facing MOD officials and service chiefs is what to do. What should they cut to keep the show on the road in Afghanistan? Should it be the carriers and joint strike fighters, with their global power projection? If we are to have them, are they not simply crowding out other vital programmes? The Minister shakes his head, but he knows that that is the question that faces policy makers in his Department.
	What about cutting the Astute submarines, which are vital for the protection of an ocean-going navy? Could the Government possibly cut more surface ships, or Future Lynx, the new workhorse helicopter for all three services? Even if they cut 70 of the Future Lynxno number is yet confirmedthe number of helicopters in the UK armed forces will be fewer than half the current figure by 2020.
	The difficulty is that coherent defence policy does not stand alone but must be part of the UK's overall foreign and security strategy. The current self-deceits, inconsistencies and financial constraints make it impossible to frame a rational long-term policy. We need a Prime Minister to decide what sort of country we realistically want to be, and what role we can realistically afford to play in the world.
	We are stretched across the middle east and central Asia with long-term commitments, like a colonial power, but with little public understanding of why we are there and paying so much in money and sacrifice. Are Iraq and Afghanistan to be the last gasp of the so-called ethical foreign policy? We need a defence review to resolve the painful dilemma that is being lived out by our armed servicemen and women, but before that the Government must forge a new foreign and security strategy to reflect a coherent view of the UK's role in the worldthe world as it is, not as some would wish it to be.
	It is Labour's combination of over-ambition, naivety and lack of funding that has led us to this pass. We remember the extraordinary Chicago speech that the then Prime Minister, Tony Blair, gave in the heat of the Kosovo crisis. He proclaimed that his actions were
	guided by a subtle blend of mutual self interest and moral purpose.
	He added, casually, that
	in the end, values and interest merge.
	I kid you not. How did anyone take such amateur philosophising seriously? How could any serious foreign policy practitioner distil any principle from such meaningless cant?
	That attempt to overlay our foreign policy with a spurious moral authority that it cannot possess has had disastrous results. We have tangled our military capabilities with legal complexities that result in terrorists being held prisoner in Basra in better conditions and safer accommodation than we have been able to provide for our own servicemen.  [ Interruption.] The Minister says that that is rubbish, but I saw it with my own eyes. The soldiers in Basra live in soft accommodation; the prisoners are in hardened accommodation.
	The result is the Royal Navy being instructed not to capture pirates off the horn of Africa for fear that they might claim asylum. The Government gave the Department for International Development a remit that set it up as though it were a state within the state, apparently answering to an altogether higher moral authority than the mere interests of the nation that pays its bills. Our armed forces, who have the responsibility for winning hearts and minds in Afghanistan, have to wade through swathes of bureaucracy to access a few million pounds for quick-impact projects, while DFID squanders billions on the corrupt Government in Kabul in pursuit of probably unattainable, and certainly less urgent, political objectives.
	Whatever we have to do in the short term we must do, but in the long term we need a new defence policy reflecting realism about the world and about what we can do, and based on the interests of the UK and the likely threats to the safety and welfare of our people over the next 20 or 30 years. We face a perfect storm of modern threats: non-state terrorism and insurgency, Muslim extremism, weapons proliferation, Iran, the rise of nationalism, Russia, the new threats arising from climate change, population growth and food and energy scarcity. All those are now set against the background of an unprecedented global financial crisis, which will have economic and strategic consequences that are as yet hard to assess.
	Ditching the chaos of the ethical foreign policy is a pitch not for amorality but for moral realism. Of course we have obligations to the wider world, but we must surely recognise that our first duty as parliamentarians is to secure the safety and well-being of the fortunate people born, or who have come to live, in these free islands. That includes the need for a defence policy that preserves our safety, maintains our influence and honours our obligations to our servicemen and women and their families, and for which we must therefore be prepared to pay.

Several hon. Members: rose

Mr. Deputy Speaker: Order. Four hon. Members are seeking to catch my eye before the wind-ups. I cannot reduce the time limit without giving any notice, because to do so would be unfair. Seven and a half minutes for each contribution would allow all hon. Members to get in, if there is a mood of co-operation.

Richard Benyon: I shall seek to abide by that, Mr. Deputy Speaker.
	It is excellent that the words Help for Heroes have been mentioned on a number of occasions in tonight's debate. A year into the life of that charity, of which it is an honour to be a trustee, I wish to pay tribute not just to those who started it up, particularly its inspirational chief executive, Bryn Parry, and to the wonderful army of volunteers, not just those in Wiltshire, who have kept the office going and who have fielded all the requests and the enormous sums that have arrived there from all around the country, but to the fundraisers all around the country, who have worked so hard. It has been an inspiration to be involved.
	Interestingly, as has been said in the debate, people in Britain have now got it; they are able to divorce what they may or may not feel about the rights and wrongs of the operations in the world in which we are partaking from their complete and universalalmost universaladmiration and respect for our armed forces. When one talks to commanders, of whatever rank, who have returned from operations, what is clear is a universal pride in the performance and courage of those whom they have commanded. We must remember that this is the hoodie generationthe PlayStation kidswho are performing so well; they are performing as heroically as their grandparents and great-grandparents did in a more heroic age.
	In the few minutes available to me, I wish to raise a few points about our care for the wounded. When people are injured on operations, they receive first-class treatment on the battlefield. When they go to medical facilities such as Camp Bastion, they receive first-class treatment there too. They then come to Selly Oak, which is a world-class organisation. I am not one of those people who signs No. 10 website petitions asking for the restoration of military hospitals, because if I were still in the Army and I were wounded, I would want to go to Selly Oak. It is a centre of excellence where people have developed real skills in dealing with cranial injuries, gunshot wounds and all sorts of other requirements.
	People then go to Headley Court, another fantastic organisation, which will be further improved thanks to Help for Heroes and a big injection of cash from the Government. My point is that we hope that after going to such places, the personnel return to their unit. If they do not, and they cannot continue in the Army, they may have to go back to their community; we all represent those communities. There are people living in our towns and villages who may not outwardly have a visible disability, but who might have a disability inside their heads. We are only just starting to understand post-traumatic stress. We know that it can manifest itself again 14 years after an event, so there has to be a system in place to look after people if post-traumatic stress revisits them at any point.
	People with a disability who are trying to come to terms with life without a job and without the support of the military family are massively important. So, I am delighted that Help for Heroes has managed to support Combat Stress, Skill Force another wonderful charity that gets servicemen into schools and other learning institutions, so that students can benefit from their presence and they can learn a new tradeand the Soldiers, Sailors, Airmen and Families Association. The help that has been given is enormously good.
	I also wish to discuss two people, whom I visited at Selly Oak some months ago: Rifleman Stephen Vause, who was in a coma, having been injured in Basra while serving with 4th Battalion, The Rifles; and Corporal Tony Burbidge. After I saw Stephen Vause in Birmingham, he went to the neurological centre at Putney, and he is now making fantastic progress at Headley Court. Having seen him more recently, when I noticed that he had progressed so much, and having spoken with his wonderful mother, Jessica Cheeseman, I realised that Stephen will require lifelong care and his mother and his wonderful family will require support for him for the rest of his days. We must consider such issues when we talk about the wounded.
	The other soldier I wish to speak about is Corporal Tony Burbidge, a career soldier, who was shot in the arm in Basra. I was not with him for long enough to make a full assessment, but he had regimental sergeant major written all over himhe was a real warrior, and the Army loses people like him at its peril. I do not know whether he has yet passed his fitness test to re-enter full service in the armed forces. There was much debate about that when I bicycled 350 miles with him for Help for Heroes. He said to me that he was struggling to reach the precise level of fitness required to return to full strength. I hope that the Army and the MOD can cut such people a bit of slack. I wrote to his commanding officer, Rupert Jones, and was heartened by his replylike all good regiments, the Rifles will look after its own. I hope that MOD will recognise that if such people cannot make the precise fitness grade, we will lose a real asset and there will be many more Corporal Burbidges to look after.
	I would have liked to use the second part of my speech to talk about a much more contentious issuethe appalling Government decision to axe the Defence Export Services Organisationand about why it is so damaging at a time when we must build up our balance of payments and support our manufacturing industry. However, I recognise that there is not enough time, so I shall wait for the Queen's Speech debate to make that contribution.

Paul Goodman: Like other hon. Members, I begin by honouring the work that our armed forces are undertaking, especially in Afghanistan and Iraq, and by paying tribute to those who have been wounded and who have died.
	This is the first time that I have spoken in a defence debate since my election to this House in 2001, which might suggest to Members, if they did not already know, that I am not a defence expert. The main threat to our armed services abroad is, of course, the same as that which endangers us at home, although less directly. Defence policy and security policy are inextricably linked. It is in that context that I want to consider a matter raised by the hon. Member for North Devon (Nick Harvey)the domestic and foreign implications of recent US military action in Pakistan.
	As some hon. Members know, I have the largest number of Muslim constituents of any official Opposition Member. Those who seek to defeat our armed forces in Iraq and Afghanistan usually claim to act in the name of their religion. My constituents, together with the overwhelming majority of British Muslims, reject that claim unambiguously, but have been troubled, as we all have, by those who seek to drive a wedge between British Muslims and their fellow citizens of other religions and none, and whose key strategic aim is to win the hearts and minds of young British Muslims, to denigrate Britain's mainstream Muslim leadership as kuffar and, ultimately, to replace that leadership with the leadership of extremists.
	Those who worship at Islamic religious institutions in my constituency come mostly from a deeply traditional Islamic background and originate largely from Azad Kashmir and Pakistan, as do up to 1 million other British citizens. I wish, therefore, to address Pakistan and its role in relation to our defence and security. The movement of people between Britain and Pakistan is habitual and frequent, and enriches both countries. I have visited Pakistan and Kashmir twice and addressed meetings there, present at which were many British citizens planning to return to Britain in due course.
	What happens in Pakistan and Kashmir touches many British Muslims more directly than events elsewhere and nearer to home, and events are taking place in Pakistan that directly affect the security of that country, which is of course an ally. On 3 September, US forces launched a ground raid into Jalal Khel, a village in south Waziristan near the Afghanistan border. About two dozen people were killed. The Americans claimed that they were insurgents, but the Pakistan Government said that they were civilians. I appreciate that the truth is often hard to establish in a war in which insurgents do not wear uniforms. However, the raid was not a solitary incident.
	In recent weeks the US has launched repeated missile strikes in Pakistan. It has been claimed that George Bush, in the final months of his presidency, has signed an executive order giving US special forces carte blanche to operate in Pakistan. These events have been closely followed in Britain by citizens of Pakistani and Kashmiri origin.
	We must, of course, appreciate that the war in Afghanistan in which British lives are at risk does not stop at the border. I understand, as we all should, the frustration of US and NATO commanders who know well that plots hatched in Pakistan cost blood and treasure, as the saying has it, in Afghanistan. Some may believe, not altogether without reason, that Pakistan is doing less than it could to combat insurgency in the tribal areas, to which Pakistan, of course, will counter that it has already done much at the cost of some 1,400 Pakistani livesanother sacrifice that we should honour.
	We should be unwilling to comment on any individual action. None the less, I believe that we should draw some definite general conclusions in the interests of our security and our defence. Pakistan is not in a stable condition, to put it mildly. That is not to say that it is in the grip of extremism, as some reporting suggests. That would be a grotesque misrepresentation. In the recent elections, the extremists fared poorly, even in the north-western areas, which are sometimes portrayed by parts of our media as a hotbed of unchallenged fanaticism. The Pakistan Peoples party, which won most seats in February's election after the terrible murder of Benazir Bhutto, is essentially a moderate party.
	Pakistan has an articulate, educated and westward-looking middle class. The vast majority of people there want what people everywhere want: prosperity, security and freedom. However, as I say, Pakistan is deeply troubled at present. We have seen the recent film footage of the terrible explosion in Islamabad, which cost the lives of more than 40 people, and we remember the Bhutto murder.
	The moderation of the people of Pakistan must never be underestimated, but one would be bold to predict a trouble-free future for that country in the medium term and especially in the short term. A key British strategic aim must therefore be to support the fledgling Government of Pakistan. The US military intervention is having an unwelcome effect in Islamabad. Only last week, Pakistan's Parliament passed a unanimous resolution calling for an end to military action. It urged an urgent review of national security. I appreciate that there is a dispute about the effect of the resolution and that it was not a reaction to US actions alone. Pakistani politicians are well aware of the Saudi peace initiative, but this development was worrying.
	As I say, we should be unwilling to comment on any individual action. We have to ask ourselves some hard questions. Are those actions likely to inflame extremism in Pakistan? The answer is yes. Are they likely to have a significant effect on countering the insurgency? I am not a military expert, but I suspect that the answer is no. Is the damage that they do in driving up extremism in Pakistan greater than any good that they might do in countering insurgency? Again, I am afraid, the answer must be yes. That harm has repercussions here at home. There is no need for me to labour that point.
	Those on the Treasury Bench have a responsibility this afternoon. I look to the Minister who responds to the debate to make it crystal clear that the Government believe that as a rule there should be no military intervention by outside forces in Pakistan without the permission of its Government and that any such intervention damages our defence interests, compromises our security and undermines the position of a key ally at a time of great need.

Douglas Carswell: Robert Kagan writes of how the world is returning to normal. The author of The Return of History and the End of Dreams writes of how many of the post-cold war strategic assumptions are coming to an end. In place of a world dominated by an all-powerful American hegemony, the world is becoming more multi-polar. Kagan writes of how new regional powers are emerging and have begun to jockey for advantage: China, India, Iran and Russia. He suggests that the democracies of the worldBritain, America and othersface a new challenge from resurgent autocracies.
	There is also the threat of radical Islamism. On 11 September 2001, the strategic environment was changed profoundly. It seems that the world is in rapid flux, yet those who make public policy move more slowly. Danger does not necessarily come from the resumption of age-old great power struggles, but from our unpreparedness for them. Too much of our defence policy remains based on residual assumptions that no longer necessarily hold. Policy is too often the product of ad hoc decision making. What is supposed to be strategic calculation is little more than policy formed in response to tactical necessity. We are ill-prepared and weak when it comes to the challenges that lie ahead. Already, our armed forces are seriously overstretched. We have asked them to do too much, on too little, for too long.
	For many people, the answer is simple: spend more moneyan extra 10 billion here, an extra 10 billion there. However, after a decade of the Government hosing additional money at health and education, we know that more money alone does not always achieve the improvements expected; so it is, I fear, with defence. Any additional expenditure on defence needs to be accompanied by reform. Hosing more money at defence alone will not improve our armed forces. Before spending more money, we need to end the years of indecision and strategic drift. Above all, we need to end the racket that is contemporary defence procurement policy.
	Our defence policy should be informed by an assessment of our foreign policy objectives, by careful, cool-headed, level-headed consideration of our national interest, and by an assessment of various strategic assumptions. That is what should determine how we prepare our armed forces. Foreign policy calculations should shape our defence strategic guidance, and our defence priorities should then be determined by what is in the defence strategic guidance. It is simply bogus to pretend that that is what happens today. Anyone who thinks that it is does not really know what is happening in the Ministry of Defence. For example, where in the current draft of the defence strategic guidance are there planning assumptions or scenarios that call for two new carriers?
	Labour came to power promising to overhaul defence procurement, yet according to the best-selling author Lewis Page, its defence industrial strategy amounts to business as usual. The defence industrial strategy is more about industry than defence. It does more to safeguard the interests of selected contractors than the interests of the armed forces. The DIS is good at putting large amounts of public money on to the balance sheets of a few contractors, but that is about all it is good for. The DIS talks about best value for money, and improving delivery and costs, but all the evidence shows that the DIS promises things that are almost by definition mutually exclusive. We cannot both shore up our defence industrial base and provide our armed forces with the best value kit in the world; it is a logical impossibility.
	The DIS is, in reality, a corporatist, protectionist racket. Lobbyists for the DIS on the political left justify it as a means of preserving jobs. The same arguments once trotted out to justify Government subsidy of British Leyland are used to legitimise squandering our defence budget. To those on the political right, the fig leaf justification is about something called sovereignty of supply. The same arguments were once trotted out to justify the corn laws.
	Defence procurement is run in the interests of the big contractors, not our armed forces. Billions are spent on what it suits the likes of BAE Systems, VT and others to supply. The taxpayer pays a high price for protectionist procurement; the soldier pays a blood price. I shall give one example. In Afghanistan, helicopters allow our troops to cover distances quickly and give us tactical flexibility, yet there are not enough of them. Why? Protectionist procurement. In a letter to me, dated 31 July last year, Lord Drayson admitted that the MOD had not run a competitive tender process to replace the Lynx. It was, he wrote
	the judgement of the department that a competition...would cause delay.
	Thus the alternatives were never fully considered.
	A 1 billion contract to build helicopters was awarded for a helicopter that cost almost 50 per cent. more than the alternatives, and which would not be ready until at least 2012. That is a long time to wait if one is in a minefield in southern Afghanistan. Sir Kevin Tebbit, who was the permanent under-secretary at the MOD when the decision to exclude rival bids was made, did not have to wait anything like that time before he joined the board of the company that got the contract. Our armed forces in Afghanistan pay a blood price for the shortage of helicopters. The price of protectionist procurement is paid in English blood in Helmand.
	It is ironic that the helicopter that eventually lifted Corporal Mark Wright and his comrades off the minefield in Helmand was apparently an American Sikorskyprecisely the kind of alternative never considered by the MOD. Those who think that procurement policy should be about protecting jobs should perhaps remember that. Sikorsky tells me that it wrote to the MOD, offering to supply some 20-plus lift helicopters within months. It tells me that it took Sir Kevin's former Department longer to respond to the offer than it would have taken the firm to fulfil it.
	Protectionist procurement weakens us. The idea that it can somehow strengthen our standing in the world to purchase military equipment from only a handful of supposedly UK suppliers is nonsense. We need off-the-shelf defence procurement. In any market where there is a constraint on supply, the seller sets the terms of trade; so it is in defence. The DIS restricts supply to a few privileged contractors. No through-life approach can stop the taxpayer being ripped off, or the armed forces being denied the kit that they need to have on time, every time.
	We need to consider making off-the-shelf procurement the default setting for our defence procurement policy. BAE Systems and VT might not like it, but it would ensure that our armed forces had the kit they need to do the tasks that we set them. It would help us to meet the challenges that Robert Kagan writes about in his book. We need off-the-shelf, multilateral procurement, working in collaboration with our democratic allies.

Tobias Ellwood: It is a pleasure to be the concluding Back-Bench speaker in what has been a very interesting debate on defence policy. There has been huge focus on Afghanistan and that is where I will focus my remarks as well. I have recently returned from yet another trip there and I am concerned that we might be heading towards a civil war there unless we see some huge changes in strategy.
	It is seven years on and there are four clear areas of concern. First, there is a lack of international co-operation, with a mess of confusion of command and control between the UN, the EU and DFID. Every day, 700 million is spent on military matters in Afghanistan but only 7 million a day on humanitarian matters, and that ratio needs to change. Our soldiers are at the top of the hill, holding the ground, looking over their shoulders, expecting something to happen in the village below. It does not happen and that is why they stay longer and longer, wondering what they are doing there.
	My next concern is the Afghan constitution, which we touched on in an interesting debate yesterday. I do not believe that the one-size-fits-all solution is suitable for Afghanistan, which is a wonderful mixture, with myriad ethnic groupings, alliances and allegiances. They do not all look to Kabul and President Karzai for leadership, but to their local jirga and the local head of the town or the village. That has been completely ignored in the constitution. We need to look at local autonomy, giving a little emphasis to the local leadership, but that has not happened. The only time that the 10 ethnic groups, on which my hon. Friend the Member for Woodspring (Dr. Fox) touched earlier, ever came together in the past was when a foreign force came in and they joined together and rallied to try to destroy it. Then they returned to arguing with or fighting each other. We need to recognise and celebrate those differences, not think that there is one size that fits all.
	There is also a lack of vision or strategy for the country. Access to the markets is limited. If any country has some product to sell to an international market, it needs to be able to reach that market. The three main arterial routes in Afghanistan are difficult to travel. There has been no decision to build any railway; only the Iranians are considering one in the east of the country. We need to ensure that there are better methods of reaching the Indian ocean and the trans-Siberian railway to export whatever produce can be grown. Before the Soviet invasion, Afghanistan was one of the greenest countries in the world. That has now been lost because of the lack of irrigation systems; 92 per cent. of the water runs out of the country and only 8 per cent. is harnessed. Those are the sort of issues that need to be tackled, but no one is doing so because each area is working on quick impact projects rather than following a bigger plan, linking together and providing a marketing strategy that can lift the country off its knees.
	It has taken a long time to understand what is happening in Helmand and to achieve co-ordination between the MOD, the FCO and DFID. There is talk of handing over to the local military, but I am afraid that only 400 soldiers have been trained locally, and that is not enough. Despite a target of 135,000 soldiers, there are only 400 of combat capability.
	After seven years in Afghanistan and five years in Iraq at a cost of 9 billion to the taxpayer, it is right to ask why it is taking us so long to make the transition to peacekeeping from war fighting and whether we could do better. Recent military engagements are increasingly characterised by the rapid defeat of the enemy by a relatively small deployment of forces, but an inability to respond to the ensuing lawlessness, which ratchets up. It starts with looting and eventually the enemy starts to regroup, and nothing happens during that small window of opportunity of limited security.
	We win the peace but we lose the war. There is an absence of a mature plan for post-conflict operations. That leads to delays in restoring essential services, establishing a basic rule of law and restarting the economy. Our troops remain rather than return home as expected, and the cost of the entire operation ratchets up ever higher. I propose that after consultation there should be a radical overhaul of defence policy and how the UK conducts reconstruction and stabilisation. I would like a new stabilisation and reconstruction force to be created. I stress that that is my personal view, but I hope that my party's Front Benchers and the Government will consider it. Such a force would allow Britain to complete the overall mission in a more timely and humane manner. We cannot rely on the UN and the EU to do that; we have seen that they are not capable of it. Nor can we rely on the Department for International Development to do it, because it does not work effectively in insecure environments. States such as Afghanistan lack the initial capability because the facilities are simply not there.
	I want the military to lead a large-scale, specialist reconstruction and stabilisation force with the objective of filling the gap between emergency humanitarian assistance and longer-term development assistance, trained and equipped to make a prompt, visible and effective impact on the way of life so that the future looks brighter. I would like the force to be able to provide continued security operations, local policing, humanitarian relief, emergency housing, emergency shelter, food, water and basic health facilities and enable the restoration of power and grass-roots local governance.
	That would be to plant the seeds; they would not be expected to flourish immediately. However, we would be proving to the locals that we meant business and wanted to empower them rather than take over. I should also like education facilities to be reconstructed and agricultural programmes to be initiated. The brigade-sized reconstruction force would have to be familiar with post-conflict non-governmental organisations and work with the EU, the Department for International Development and the USA. Gaining experience before we go inthat is my vision. Believe it or not, all that is happening today in Afghanistan thanks to our military, not by design but by accident. No one else is doing it.

Kevan Jones: indicated dissent.

Tobias Ellwood: The Minister shakes his head, but the mosque in Musa Qala is being built not by the Department for International Development, the EU or the UN, but by Royal Engineers. Why? Because that is exactly what they want to build, because the locals want it. We lost the town once before because nothing was happening. The Royal Engineers got frustrated, so they did things themselves. Let us acknowledge that no one else is better positioned than our military to do such work in that small window of opportunity of about six months to a year. After that, we could hand over to the many organisations that do such a wonderful job in those areas.
	As I suggested, I envisage the unit as a brigade-sized one. That is the minimum size required if it is to be able to dovetail into the operational environments in which we are involved. I would leave the Ministry of Defence to determine the detailed make-up, but I would see a massive contribution coming from the Territorial Army, who have myriad skills. I am thinking not only of bricklayers and so forth, but of civil servants from the local council who could be TA-trained so that they could look after themselves in a dangerous operation and go straight to the local jirga to explain how to set up a simple council, for example. That is the energy that I would like to be put in, but that does not happen at the moment.
	I turn to the long-term objectives. So important is a stabilisation force that I envisage a two-tier echelon developing in the UK. The first would be the combat brigades and the second would be stabilisation forces. Brigades would rotate, playing a similar role, so that there was a firm understanding of the importance of their work.
	The first thing that will be asked about my plan is where the money would come from. DFID has a massive budget of 5 billion; the cost of being in Iraq and Afghanistan is 9 billion already. The capitation costs of a brigade is about 100 million a year. I envisage a small proportion of DFID's 5 billion budget being taken away; it would be for humanitarian aid, but it would be given to the MOD so that it could establish a brigade-level stabilisation force to do the work.
	General Petraeus said that our objective should no longer be to defeat the enemy, but to enable the local. That is taking rather a long time. It did not happen in Iraq and it is taking far too long in Afghanistan. There has been a revolution in how we conduct war; we have moved from operating on a cold-war basis to doing so on a counter-insurgency basis, and we require the same revolution in our peacekeeping capabilities. The US is doing exactly that, but the UK Government Departments continue to pursue separate agendas and territorial battles over funding. The consequence has been inefficiencies and delays in following our armed forces in their efforts to provide a secure enough environment for stabilisation work to begin. If we as a country are willing to step forward when other countries hesitate in order to support democratic values, defend borders and challenge rogue states, then we must have the right tools not only to fight wars but to keep the peace.

Gerald Howarth: I first join other hon. Members in welcoming the new Secretary of State to his post. Like me, he not only has responsibility for defence matters in this place but has a large BAE Systems facility in his constituency. I, for one, make no apology for that, and I am sure that he will not either, but he will need to judge matters carefully when he comes to make his decisions.
	I welcome back to the House my hon. and gallant Friend the Member for Westbury (Dr. Murrison), who was unable to attend our previous debate because he was serving abroad with the Royal Navy in his capacity as a reserve officer. It is good that this House has hon. Members who are able to continue to serve their country in the way that he does.
	We have had another well-informed debateso much so that it will of course receive no attention from our friends in the media. Frankly, we might as well operate under Chatham House rules for all that it matters to them. I was most impressed by many of my hon. Friends' contributions. It is a pity that at one point we were down to just one Labour Back Bencher. Many Labour Members participate in the armed forces parliamentary scheme, take an interest in defence and have defence interests in their constituencies, and I suggest to the Minister of State that he might try to encourage more of them to join in these debates.
	We heard excellent speeches from my hon. Friends the Members for Gravesham (Mr. Holloway) and for Bournemouth, East (Mr. Ellwood), who have been in theatre recently. My hon. Friend the Member for Woodspring (Dr. Fox), the shadow Secretary of State, has been delighted to receive so many plaudits for what was clearly an excellent speech. We were pleased to welcome my hon. Friend the Member for Wycombe (Mr. Goodman), who is a newcomer to our debates. We look forward to hearing from him again. He made some extremely important points, as did my hon. Friend the Member for Bournemouth, East, about the importance of winning hearts and minds. All that I can do is to refer my hon. Friends to the excellent speech that my hon. Friend the Member for Westbury made yesterday in Westminster Hall. My hon. Friend the Member for Bournemouth, East referred to a reconstruction and stabilisation force, and rightly paid tribute to the role of the Royal Engineers as combat engineers. I have Gibraltar barracks in my constituency, and I am acutely aware of the important part that they are playing on the front line.
	In the debate earlier this month, I pointed to the new geopolitical situation, particularly to the new assertiveness on the part of Russia following its spectacularly successful invasion of Georgia, its claim to large swathes of the Arctic, and the rebuilding of its military capability. Earlier this week, several of us met former Russian Prime Minister Mikhail Kasyanov, whose assessment that Russia is returning to the more authoritarian style of the Government of the old Soviet Union confirmed my growing fears.
	However, it is not just a resurgent and assertive Russia that we need to note. At the risk of being accused by the hon. Member for North Devon (Nick Harvey) of waxing lyrical on the plethora of alternative threats, I would like to refer to some of those already mentioned by other hon. Members. As Rear Admiral Chris Parrywho until recently was development, concepts and doctrine centre director at the Ministry of Defenceobserved at the Jane's-Cityforum conference this week, the projected population growth from 6.7 billion to 9.2 billion by 2050 will intensify competition for resources, climate change may intensify migration, and ideological pressures are increasing. Some of those aspects were acknowledged by the Secretary of State. My hon. Friend the Member for Harwich (Mr. Carswell)I agreed with him on this pointrightly said that we are in a state of flux.
	Many hon. Members have referred to the immediate imperative to secure the best possible outcome in Afghanistan in the shortest possible time and, as my hon. Friend the shadow Secretary of State said, to establish clear benchmarks. However, there is a danger of becoming overly focused on that narrow objective. I well understand that today's commanders feel the need to optimise for the most likely scenario, but to abandon the ability to engage in large-scale manoeuvre operations would render the security of the United Kingdom vulnerable. When General Dannatt said last year that our capacity to meet the unexpected was almost non-existent, that should have been a wake-up call. Like my hon. Friend the Member for Congleton (Ann Winterton), I welcome the investment in the new range of armoured vehicles for Afghanistan for which I and others called three years ago, although we await the details of which major programmes will be slashed in order to pay for this 700 million commitment.
	I fear that we are at risk of losing key military capabilities, either because there is no time to train or because we lack the necessary equipment. We should be under no illusions. The regeneration of a lost capability will not be remedied overnight, so we need to prepare, which is what defence of the realm is all about. I shall give one example: anti-submarine warfare. With the contracting fleet of Nimrod aircraft available and the heavy commitment to surveillance in Afghanistan and Iraq, is the Minister satisfied that we have the requisite capability to respond to a threat that could be posed by Iran, for example, or by Russia's Akula II submarines, which I am told are extremely quiet and carry cruise missiles? As my constituent Richard Gardner, the editor of  Aerospace International magazine, put it in this month's edition:
	Even if the long delayed Nimrod MRA4 programme survives, the very small size of the fleet (perhaps now only 9 down from 21) will clearly be inadequate to provide more than a token maritime reconnaissance capabilityjust as submarine building resumes in Russia and many other countries.
	Against the highly uncertain background to which many have referred in the two debates we have had this month, it is truly astonishing how this Government have slashed our military capabilities. I shall give some examples: infantry battalions have been cut by 50 per cent. from 107 in 1997 to 50 today; combat aircraft have been cut by 44 per cent. from 339 to 189; support helicopters have been cut by 33 per cent. from 77 to 52; and as we all know, destroyers and frigates have been cut by 30 per cent. from 35 to 25. As my hon. Friend the Member for North Essex (Mr. Jenkin) intimated, rumours abound about the prospects for further reductions in the equipment programme. For the certainty of the House and British industry, it is time that the Government made clear where the equipment examination is going and when they are going to report to the House about it. The hon. Member for Thurrock (Andrew Mackinlay) made the point that there is a lack of modern equipment to train on, and my hon. Friend the Member for Croydon, South (Richard Ottaway) rightly provoked the Secretary of State into committing to provide full cover for the carriers, and we will hold him to that.
	On the issue of equipment, I was pleased to hear the Secretary of State say that he will give maximum support to the export opportunities that arise from Britain's defence industrial base. It is a pity he was not Secretary of State a year ago when the Defence Export Services Organisation was scrapped, as my hon. Friend the Member for Newbury (Mr. Benyon) rightly pointed out. That was an absolute disgrace. My hon. Friend pointed out that morale is low, and that some UK Trade  Investment staff have apparently refused to co-operate with the Defence and Security Organisation staff on moral grounds; we need to be told whether that is true or not.  [I nterruption. ] The Minister says that that is rubbish, but the issue is very important.
	As far as the defence industrial strategy is concerned, I am afraid to say that I fundamentally disagree with my hon. Friend the Member for Harwich. He is entitled to his view, but I have to put on the record that some of the things that he said about buying off the shelf are not the policy of the Conservative party. The policy of our party is to ensure that we have sovereign capability over key equipment, such as the joint strike fighter, and his suggestion that the whole procurement programme is a corporatist, protectionist racket is very wide of the mark.
	Moreover, for the benefit of those in Yeovil, to whom I spoke when I visited Westland 10 days ago, we feel that the Future Lynx is the only game in town. I hope that the Secretary of State will make a decision on that quickly.

Liam Fox: Where's the Yeovil MP?

Gerald Howarth: My hon. Friend asks where the hon. Member for Yeovil (Mr. Laws) is. He waxes lyrical in his constituency about this matter, but he never turns up to take part in these debates, which is a great shame. I visited Yeovil; perhaps he would like to visit the House and participate in these debates.
	Let me deal with personnel. We all rightly pay tribute to the calibre of our armed forces, but, as my hon. Friend the Member for North Essex said in a passionate speech, which I salute, a huge burden falls on members of the armed forces and their families. That is why national focus has shifted to the military covenant. It is important to remember that the covenant is not between the armed forces and the Government, but between the armed forces and the people. We are the representatives of the people, and it is our duty to ensure that the people fulfil their part of the covenant. We do it by pressing the Government to ensure that they deliver on behalf of us all, as the people, with whom the covenant is made.
	The Defence Committee, so ably chaired by my right hon. Friend the Member for North-East Hampshire (Mr. Arbuthnot), drew attention to the relentless impact of operational tempo on the armed forces, especially the Army and Royal Air Force. Ten per cent. of Army personnel exceed the target of 415 days' separated service in any 30-month period. To put that in context, it means pretty much being away from the family for half the time in a year and a halfnine months. It is a huge commitment, which we need to appreciate. At the same time, 10 per cent. of RAF personnel exceed the 140 days in any 12-month period on detached duty. That is four times the target rate.
	As at 1 September, the Army was 3,300 below strengthnearly 4,000 if account is taken of Gurkhas over the trained requirement of 3,000. The RAF is 1,260 short and the Royal Navy 1,360 short. The hon. Member for Thurrock and the hon. Member for Colchester (Bob Russell), who is proudly wearing his 16 Air Assault tieas Aldershot was formerly the home of the Parachute Regiment, he and I share an affection for itpointed out that an over-reliance on Commonwealth recruits has developed. In 1998, there were only 360210 of whom came from Canada, South Africa, New Zealand and Australia. However, last year, there were no fewer than 7,240more than 2,000 Fijians and another 1,850 from the Caribbean. The Minister should listen carefully to the points that Members of different parties have made about the extent of the over-reliance.
	My hon. Friend the shadow Secretary of State and my hon. Friend the Member for Salisbury (Robert Key) pointed to the wave of liabilities that arises from the extensive injuries that our armed forces have sustained on operations. We are not only considering physical injuriesmy hon. Friend referred to the work of Combat Stress. I pay tribute to the work of my hon. Friend the Member for Newbury for Help for HeroesI am proudly wearing its bangle, as does almost every Army officer I meet. Those charities do a fantastic job, as do the Army Benevolent Fund, the Royal Air Force Benevolent Fund and others. It is not all Help for Heroes, great though that charity is. They all do fantastic work.
	Combat Stress has 8,000 people on its books, with 1,160 new referrals so far this yeara 16 per cent. increase on last year. That is a serious matter, and the nation must step up to the plate to meet those people's requirements in future. We, as parliamentarians, cannot allow the issue to be ducked. I hope that the Minister has heard the words of my hon. Friend the Member for Newbury. Corporal Burbidge and his friends should be found a role in the military. I am sure that it is possible to do that.
	I conclude by referring to the Ministry of Defence's annual report and accounts for 2007-08. They reveal:
	For every one of the last 7 years the AF have operated above the level that they are resourced and structured to deliver. Achieving this has only been possible at the expense of the readiness of the AF to undertake contingent operations, and with an unavoidable impact on service personnel... The force structure cannot sustain indefinitely the nature, scale and intensity of operations being conducted in Afghanistan and Iraq over the past two years.
	The Secretary of State says that his military advisers assure him that that can be managed. However, as my hon. Friend the Member for North Essex said, the indictment by the Ministry of Defence of its own conduct seriously undermines its claim to have a coherent policy. If we add into the equation all the potential threats that could be out there, which I enumerated earlier, we can see that our capacity to meet the unexpected is almost non-existent. Our capacity to meet a major threat is non-existent, because we do not have the force structures to deal with one; we have been limited to the force structure that we now have for expeditionary operations.
	As my hon. Friend the Member for Salisbury said, our duty to the nation is to point out the potential risks to our freedom and security. The people must then decide what role they want the UK to play in the world. We cannot continue to say, This is what needs to be done, but here is a budget that we know is inadequate for the job. That is why we shall have a defence review immediately after the next general election. I make no secret of the fact that I would relish the challenge posed to the current ministerial team by my right hon. Friend and neighbour the Member for North-East Hampshire to inspire the nation to understand the importance of defence in the maintenance of the freedom and prosperity of these islands.

Bob Ainsworth: Once again we have had an excellent debate. However, I do not have time to respond to all of the many valid points that have been raised in every corner of the Housea very knowledgeable Houseabout defence policy.
	In thinking about how to respond to the debate, I decided that I ought to start by at least trying to reply to the point made by the Chairman of the Select Committee, the right hon. Member for North-East Hampshire (Mr. Arbuthnot). He raised the point, which is raised with us repeatedly, about the level of understanding of defence issues, of our armed forces and of the operations in which they are engaged not being as high as it should be. We all bear a responsibility to address that. It is not only the ministerial team who need to try to explain and inspire, but every one of us. When we consider the efforts being made, it is the responsibility of all of us in the House to explain the dangers, the sheer hard work undertaken on our behalf by our armed forces and all the associated defence issues.
	Having quoted Pericles, the right hon. Gentleman descended into some despair, but I do not accept that the people are foolish. We have come a long way, even in the past year, in terms of people's level of recognition and understanding of armed forces issues. I have noticed that, and I do not think that it is just because of where I stand. The people have moved and developed a greater understanding of defence issues and our armed forces. The work done by the Under-Secretary of State for Defence, my hon. Friend the Member for Grantham and Stamford (Mr. Davies) helped in some small measure to focus that increased recognition.  [ Interruption. ] I know how he is loved by those on the Opposition Benches, so I thought that I would throw his name in.
	We have made progress on such issues, but we need to do more. My hon. Friend the Member for Thurrock (Andrew Mackinlay) talked about the need to commemorate past sacrifice and past wars and operations. I do not think that we do nearly enough to educate our people about our military history and try to ensure that they understand and can ground where we are now from our history. We ought to make more effort in that regard.
	The right hon. Member for North-East Hampshire related that lack of understanding to our current operations in Afghanistan. Again, I agree that a lot needs to be done to make people understand not only why we are there and what we are doing, but the massive military complexities of the theatre of operations and the huge political complexities, which in many ways are even more difficult than the military ones.
	I do not think that anyone expects the task in Afghanistan to be easy. All the parties represented in the House recognise and accept that we need to do it. Although it is very niceand something that we ought to doto try to build the Afghan nation, to try to give the Afghan people basic rights, to try to enable Afghan women to go to school and to try to stop the mediaeval nonsense that comes from the Taliban being imposed on the Afghan people, the real reason that we allow our young people to go there, and sometimes to die there, is that it is in our vital national interest to pursue this issue. We therefore have to try to increase people's levels of understanding.
	I wish that, when one or two Members of the House visit the Afghan theatreor any other theatre, for that matterthey would go there with at least a half-open mind. Some of the comments made by the hon. Member for Bournemouth, East (Mr. Ellwood) appeared to display a prejudice, rather than a half-open mind. I would have hoped that he would have least looked at some of the achievements. Of course, a lot of those achievements have been delivered by our troops in highly dangerous environments

Tobias Ellwood: rose

Bob Ainsworth: I am not going to give way to the hon. Gentleman.
	A lot of those achievements have been delivered by our troops in highly dangerous environments, where only they can do the reconstruction. They know that, and they know that it is about inspiring people, about winning hearts and minds, and about winning people over.

Tobias Ellwood: rose

Bob Ainsworth: I am not going to give way.
	The troops do that work because no one else can do it in areas such as Musa Qala, for example, a few weeks after we took the town.

Ann Winterton: Will the Minister give way?

Bob Ainsworth: I will perhaps give way to the hon. Lady in a while.
	The right hon. Member for North-East Hampshire needs to do a bit of a job himself, in inspiring his own party. If we are genuinely going to explain defence issues to the nation, we need to start by not deceiving the nation over defence spending. Some Conservative Members on the Front and Back Benches, genuinely want a big increase in defence spending; I understand that. Some, however, repeatedly seek to give the impression that they are committed to that, but they are not. Their own party is not committed to any increase in defence spending. If we are going to try to explain, to develop a level of understanding and to inspire, we need to start with a little bit of honesty, do we not? When the leader of the Conservative party said that he did not back any of the Government's current spending levels other than the health spending level, I know that it upset a lot of people on his Front Bench. Let us acknowledge that. Neither the Conservative party nor the Labour party is committed to any increase in defence spending whatever. If we are going to inspire and explain, we ought at least to be honest.

Bernard Jenkin: I have the highest respect for the Minister, but will he be honest and tell the House exactly what the financial situation is in the Ministry of Defence? It is an open secret that he has not got the money to fulfil the equipment programme that he says he is committed to, and we are now reading in the papers that a big programme is going to be cut. The Secretary of State might not have used those actual words, but that is clearly the impression that he left with  The Sunday Times. When are the Government going to be honest about the real situation?

Bob Ainsworth: There are many challenges in the defence budget, as the hon. Gentleman knows. Our people are stretched, and they have been working at above capacity in recent years. We do not deny that. I know that he honestly believes that we ought to commit to a huge increase in defence spending. Equally, however, he knows that his own party is not committed to such an increase.

Linda Gilroy: Does my right hon. Friend agree that we all bear a responsibility to exercise self-discipline when we talk about these things, and that it is particularly important that the Opposition should not play into the propaganda war that is going on in Afghanistan?

Bob Ainsworth: My hon. Friend is right. There is misinformation and, on the odd occasion, mischief. It does not help us to develop an understanding and to convince people that our operations in Afghanistan are in our vital national interests and that we need to proceed with them.
	A number of hon. Members mentioned helicopters. The hon. Member for Woodspring (Dr. Fox) accused us of having a chronic under-availability in air capacity. I hope he recognises that there has been a 60 per cent. increase in the number of helicopters in the Afghan theatre. The main increase has been in the number of Sea Kings, which are now fitted with the new rotor blades that enable them to operate. Eight additional Chinooks are being modified, and we have bought an additional six Merlins. If we get the transition in Iraq that we are all hoping to see in the near future, it will potentially make the Merlin fleet available for use in the Afghan theatre.
	The hon. Gentleman asked what we are trying to achieve on piracy and about additional capacity. Our motives for getting involved in the European operation are to increase the capacity that is available to deal with the pirate problem off the east coast of Africa and to capture the political will of our allies. We are going to be able to ensure that there is no conflict with the operations of Combined Task Force 150. By providing the command structure ourselves from Northwood, which we have offered to do, and having provided a contribution towards the European security and defence policy operation on piracy, we should be able to ensure that the operations are complementary. It gives us a lot more capacity for dealing with piracy than we would otherwise have. HMS Northumberland is on station, armed with beefed-up rules of engagement and able to take on the pirates, and to confiscate and destroy their equipment.
	Issues to do with decompression were raised. The hon. Gentleman made us aware of some grades in the Foreign and Commonwealth Office who have decompression capabilities available to them. I do not know what decompression is available to Members of Parliament when they leave theatre, either. Our people have a six-month tour of operation. They get rest and recuperation. We have introduced decompression for very good reasons. I hope that we can keep that up, develop the thinking behind it and ensure that we use that decompression methodology to minimise the stress on our personnel coming back from theatre.
	My hon. Friend the Member for Thurrock raised an important issue at this time of year: parcels and post for theatre. We have tried to discourage people from getting involved in the generous acts that they want to participate in because of the consequences that inevitably flow from them. Our people in theatre want to receive parcels and messages from their loved ones at Christmas. We have got the free post facility for them. If the system is swamped by unnamed packages, it inevitably delays what is most precious to the people who are spending Christmas in theatre.
	We are trying to develop other schemes and methods whereby people can show their appreciation. There are voucher schemes and the uk4u charity. The Under-Secretary of State for Defence, my hon. Friend the Member for North Durham (Mr. Jones), is looking at how else we can enable people to show their appreciation to the troops at Christmas time without creating the unforeseen circumstance that unsolicited mail creates of blocking that which is most precious to our peoplemessages and parcels from their loved ones.
	My hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) raised the issue of Devonport, inevitably and yet again. We are committed to the sustainability of the royal naval base at Devonport. We know that submarine work alone will not provide that. We need other depth work to smooth the workload there. We are committed to delivering that. On top of that, flag officer sea training and the amphibious expertise will be based, kept and maintained at Devonport.
	 It being Six o'clock, the  motion  lapsed, without Question put.

MOLE VALLEY (SOUTH EAST PLAN)

Motion made, and Question proposed, That this House do now adjourn. [Chris Mole.]

Paul Beresford: I am delighted to have the opportunity to raise this issue again. I am also delighted to see the Under-Secretary of State for Communities and Local Government, the hon. Member for Tooting (Mr. Khan), hereprobably more delighted than he is to be here, or indeed to see me here. This is a continuation of a very broad debate that began in Westminster Hall about a week ago, which raised many concerns and questions. Because we were desperately short of answers to those questions then, I shall leave the Minister plenty of time to answer them now. He nods; I am sure that he will fulfil my every wish.
	The Mole Valley constituency borders London. It contains large areas of green belt, which are London's lungs. It consists of almost all the Mole Valley district council area, and five eastern wards of Guildford council. It also contains very large areas of outstanding natural beauty, special protection areas, special areas of conservation, commons and farmland. It contains two small towns and perhaps 32 separate villagesat least, they are separate at the momentand there is a deep desire in the area to retain them as separate communities. That is recognised in the draft plan, even if it is contradicted by other parts of it. If we ignore genuine gardens, including back gardens, there are very few genuine brownfield sites to be included in the plan for growth.
	I accept that more homes are needed. I became very aware of that when as a Minister, back in 1997, I saw and understood the house projection figures. Mole Valley and, indeed, Surrey as a whole generate their own increases: children leave home and look for somewhere to live, grandparents are much more independent than they used to be, and the divorce rate is fairly high, which means two homes rather than one. There has been immigration into the area from elsewhere in the United Kingdom and from abroad, as people have come to the area looking for work.
	Over the years, both Mole Valley district council and Guildford borough council have enabled considerable growth to take place. In fact, I believe that both councils are more than meeting their current housing requirements. Almost all those gains have been what we call windfalls: building in back gardens, the demolition of a single house and the building of two or three houses in its place, or the demolition of several neighbouring houses and the building of a small group of new housesor, in some cases, relatively low-rise blocks of flats.
	In our part of Surrey, green-belt areas, areas of outstanding natural beauty, commons and the like are considered sacrosanct, and any suggestion of encroachment prompts an almighty and united protestthe sort of outcry, as I told the Minister in the Westminster Hall debate, that there would be in his constituency in the event of proposals to build on Tooting Bec or Tooting Graveney common, Garrett Green or Tooting Gardens. I probably know those sites as well as the Minister does, and I am sure that he would be manning the barricades hand in hand with his very popular local authority to defend them if there were any proposals to build anything at all on them. We will see the same effect in Mole Valley if a threat is posed to any of those green-belt and other special pieces of land, but it is there in the plan.
	There was deep concern about the initial figures in the South East England Regional Assembly's draft plan, but there is now absolute horror at the increase proposed by the Government inspector, and at a number of other changes apart from those straight numbers. For example, the figures are now not a target but a floor. There is an implied acceptance that some of the green belt must go, along with a refusal to accept the windfall growth that I mentioned earlier.
	As I have said, the growth of recent years has resulted from developers purchasing large single properties, or making an amalgam of small purchases, in order to demolish them and build additional properties. A sensible prediction of windfall growth can be made, and should be allowed to be built into the response from local authorities. No large disused industrial sites, or even moderately sized brownfield sites, are easily available. If windfalls cannot be included, and if the targetsor floorsremain, precious green-belt land will have to be lost and settlements or villages will have to be amalgamated, although that is contrary to the plan.
	The Minister for Housing, the right hon. Member for Derby, South (Margaret Beckett), on Monday accepted in the Select Committee that the windfall houses should be taken into account. She said that they are
	housing additions from whatever source they come.
	On a more basic point, many feel that the population growth prediction is highly questionable. For example, there seems to be no account taken of outward migration. Further, there is a respectable theory that constantly to supply in an attempt to meet demand simply encourages increased demand.
	I am deeply concerned that there appears to be little or no effort to use the planning system and other systems within the Department to encourage job growth in slow employment areas. The provision of jobs in northern deprived areas would help to reduce immigration and housing demands in the south-east. Recently, huge funds for RDAs, which could have been used in that area, have been moved forward to this financial year for housing budgets: 25 million from next year and 275 million from 2011-12. These funds could have been used to ease the pain in the south-east and the north. It is obvious that more houses mean more people, and more people mean more demands on the roads, greater demands on the health services and huge and increasing demands on education and police.
	Some years ago, when the former Deputy Prime Minister made one of his rare visits to his own Department's Select Committee, the infrastructure issue in the south-east was raised, specifically in relation to the anticipated south-east housing numbers. The right hon. Gentleman agreed that housing development and improved infrastructure should move hand in hand.
	Secondary schools in Mole Valley are overflowing and children are being bussed miles to get an education. The county has no school capital funds and road improvement plans have been shelved because there is no money. Hospitals, rather than being improved and enlarged, have been threatened. There are three serving my constituency and we have had to fight to save them. Two have been saved, but there is still a big question mark over one.
	My requests to the Minister tonighthe can take these away to the Minister for Housingare as follows: first, to rethink and reduce the figures to below those of the original SEERA draft, at the very least; secondly, to allow windfalls to be taken into consideration; thirdly, to ensure that the green belt, areas of outstanding national beauty, special protection areas and special areas of conservation and commons in the south-east remain sacrosanct; and fourthly; that finance for Surrey's education, transport and hospitals be allowed to grow to meet even those new reduced housing targets.
	The Minister for Housing appeared to show some understanding of the issue at the Select Committee, and I would be grateful if the Under-Secretary took this message to her. I left an area of New Zealand that was spectacularthe Lord of the Rings area. The Minister may have seen the films. It gives me enormous pleasure to take New Zealanders from that area, who are so proud of their scenery, to the Surrey hills. They, equally, are stunned by what they see. Those hills must not be concreted over.

Sadiq Khan: It is a pleasure to be able to respond to the hon. Member for Mole Valley (Sir Paul Beresford). I had the pleasure of taking my wife and two daughters to New Zealand so I have seen for myself what a wonderful country it is. I also spent some time in his patch when I was a student, so I also realise what a wonderful constituency he represents. He knows that we have something else in common; he was the leader of Wandsworth council, on which I was a ward councillor for 12 years. He will recall the banter we exchanged in a Westminster hall debate last week about some of his legacy, as seen in my surgery each week arising from the crisis faced by those on the housing waiting list.
	I have listened to the hon. Gentleman's speech today, and to the contributions he and other Members made to last week's Adjournment debate on the south east plan to which he referred, and I am aware of the concerns he has raised and the reasons for the passion exhibited by him both today and during last week's debate. We recognise the sensitivities and genuine concerns he has raised, and I for one would not accuse him of nimbyism at all.
	Given the importance the Government attach to regional spatial strategies such as the south east plan, the hon. Gentleman's interest in it is very welcome, as is this opportunity for me to address some of his concerns. I shall deal with the specific points he raised, but let me first deal in summary with the general issues raised both today and in last week's Adjournment debate. They centre on the proposed level of housing and especially the implications that may have for the green beltthe lungs, as the hon. Gentleman called itand on whether there will be sufficient social, physical and other infrastructure to support the required level of growth. The hon. Gentleman will be aware that I am unable to discuss individual proposals such as housing numbers or the consultation process that ended only last Friday at 5 pm, or the role that my Department and the Secretary of State play in the planning process. However, I shall try to address as many points as I can, and to demonstrate to the hon. Gentleman that we are sensitive about, and alive to, the points he has raised, and that we are listening.
	On housing numbers, let me first make the observation that during the past 30 years there has been a nationwide 30 per cent. increase in the number of households and a 50 per cent. drop in new house building. For the avoidance of doubt, it is worth reminding ourselves that for the vast majority of those years the country was under a different Administrationand that the hon. Gentleman was a junior Minister during three of those years. Therefore, if blame is to be apportioned for the lack of houses built over the past 30 years, it is clear where the majority of it should lie.
	It is also worth stating that the average age of a first-time buyer in the south-east is now 33. As importantly, there are more than 200,000 households on council waiting lists in the south-east, and that does not take into account those individuals and families who do not bother to put their names on the list because there is no realistic prospect of their being rehoused. Moreover, there are more than 7,500 homeless households living in temporary accommodation in the south-eastsome of them might even be living in Mole Valley. The panel recommended that there should be 32,000 dwellings a year; the proposal is for a modest 4 per cent. increase to 33,125 dwellings a year.
	People have talked about the current short-term international economic conditions. Affordability has been a serious long-term problem for many people in the south-east, and without action it will remain so, but we hope that we will soon get over this blip. The hon. Gentleman will be aware of the comments made by my right hon. Friend the Minister for Housing about the steps we are taking to try to get out of this turmoil sooner rather than later, but what we should not be doing during this economic downturn is denying our children the opportunities we have enjoyed in relation to housing, or the opportunity to purchase a home. Let me emphasise that we are talking here about our childrenincluding those of the hon. Gentleman, the people who visit his surgery, and those who have objected to the plan.
	The hon. Gentleman gave examples of situations in which there might be a need for additional housing, such as when marriages end in divorce, so creating a requirement for two homes rather than one. Most of the growth and development needed in the south-east over the next 20 years is a result of indigenous change or the symbiotic and nationally important relationship the region has with London. He made the point that his constituency should not have to share the burden of the London overspill. The Government recognise that ensuring that the right houses are built in the right places at the right time will not be easy, but we cannot and have not ignored that responsibility, and we take it seriously. The proof of that it is in what has happened in recent times. We have spent 700 million on increasing affordable housing in the south-east alone in the past two years, and in the next three we will increase that package to 1.24 billion. Even more will be spent via the housing rescue package announced in the House on 2 September.
	We recognise the need for new housing for those who want to get a foot on the property ladder, including the sons and daughters of the constituents whom the hon. Gentleman mentioned. Our challenge for the future is how we balance the interests of the current generation with those of future generations of people who will need homes. Their voice seems not to be heard during debates at local, regional or national level. That is why it is important that local authorities, MPs and other stakeholders across the south-east work to address housing provision. We cannot put our heads in the sand and walk away from the issue, and this Government certainly will not, as that would be hugely irresponsible. The means of achieving the right balance between current and future generations is the adoption and implementation of regional strategies such as the south east plan, although one size does not fit all.
	The hon. Gentleman mentioned the green belt and gave the example of the outrage that there would be in Tooting were the local authority to build on metropolitan open land such as Tooting Bec common. Putting aside where the housing goes, if only Wandsworth council had made provision for social housing over the past 30 years, that would have been wonderful. However, comparing building on metropolitan land such as Tooting Bec common with what is envisaged in the south east plan is, frankly, disingenuous, unfair and misleading. I know that the hon. Gentleman would not want to mislead the Chamber about what we are planning, which is why it is important to clarify the matter.
	As I stated last week, the green belt remains an important part of national policy, and the Government continue to place great importance on the correct application of the long-standing policy in planning policy guidance note 2. Proof of that commitment can be found in the important fact, which I mentioned last week because people often neglect to mention it when they make objections, that the green belt has increased by about 33,000 hectares since 1997 and now accounts for about 13 per cent. of England's land mass.

Paul Beresford: I have heard those figures before, and the Minister is right, but they are national, not for the south-east. The problem at the moment is that the south east plan implies that there is a threat, through a review, to the green belt in the south-east. I am particularly concerned about Surrey and, of course, my constituency.
	While I have a moment, I think that I could argue with the Minister about the number of houses provided by Wandsworth council, but that is not part of the debate.

Sadiq Khan: I would like to respond to the hon. Gentleman's point about the south east plan and the green belt, but he will be aware that I am unable to. The consultation ended on Friday and we are reading the responses very carefully. I can respond generally, however.
	If the criticism is that we do not respect the green belt, that we do not understand the policy or that we have been reckless in the suggestions in the south east plan for where housing should go up, that is not true. The Government are committed to the creation and maintenance of sustainable communities within urban and rural areas, and national policy is intended to assist in the delivery of the land use and development needed by communities to achieve that. The hon. Gentleman will appreciate that I cannot comment on the details, but I can again confirm that the Secretary of State considers that her proposed changes, which would protect the general extent of the green belt in the south-east, strike the right balance between the continued application of green belt policy, the ability of planning authorities to address local issues and the need to create and maintain a network of sustainable communities. For the avoidance of doubt, let me be clear that as part of their responsibility to current and future generations, local authorities must make the difficult decisions about the most sustainable locations for the growth and development that we need, and then plan for its delivery.
	The hon. Gentleman mentioned infrastructure. He will know that last week, we heard much about the need for infrastructure before expansionthe so-called i before e. I acknowledge the importance of, and need for, infrastructure of all types. Because of that need, the Government have invested considerable sums in public sector infrastructure across the south-east. I have already mentioned the 1.24 billion devoted to affordable housing, but we have also increased public expenditure on transport in the south-east in the most recent five years, from 1.9 billion to 2.3 billion, and health expenditure was more than 11 billion in 2006-07

Paul Beresford: I appreciate the figures that the Minister has given. I am sure that they are correct, but they are for the south-east. If he examines the situation in Surrey, he will see what I meant about there being no growth and no expenditure; its police have the lowest per capita grant, per policeman and policewoman, in the country. They cannot run a service for an increased population if they do not get better funding.

Sadiq Khan: Our settlements are on a three-year rolling programme. That sort of lobbying raises important points that should be made during the next spending review, and they will be taken into account. The hon. Gentleman knows that the capital reviews also take those things, including population growth and poverty indices, into account.
	I could cite other examples of increased investment in the south-east, although the hon. Gentleman might complain that such an approach would not deal specifically with his constituency over the last period. I can tell him that there has been more spending in his constituency over the past 11 years than at any time in history. I am happy for him to challenge me on those facts, should he wish to do so.
	This is not just about spending money; it is not as simple as i before e. Raw demand should not be the sole determinant of whether there is housing growth, nor should we assume that patterns of demand will stay the same. That is why the Department for Transport has been clear that the long-term way in which to deal with congestion is not necessarily to build more roads, but to plan holistically and to consider demand management. That basic model applies to energy and water supply, and to any other resource that we use.
	Next year, we will introduce the community infrastructure levy system, which will allow local authorities to raise and spend, in a timely and efficient manner, considerable sums within their own areas on the infrastructure that they demonstrate is necessary. Some of the concerns made by the hon. Gentleman will be resolved by the CIL. We are committed to supporting the necessary infrastructure investment to deliver increased growth, including housing, and we are putting in place the processes and funding to deliver on that commitment.

Paul Beresford: I am sorry to interrupt again, but although the CIL will be collected locally, it will then be held centrally for distribution centrally. That does not mean that when Mole Valley, Guildford or Surrey collect the money they will see any of itexperience of how this Government have distributed funds leads me to believe that they will not see it.

Sadiq Khan: I do not accept that the hon. Gentleman's constituents will not see the fruits of the fund. The CIL will be a new charge that local authorities, such as his, will be empowered, but not required, to charge for infrastructure on most types of new development in the area. He will be aware that it will be possible to spend the money locally, if his local authority wishes to do so. If it decides to set a low charge, because it wishes to encourage developers, that will be its choice. His experience as leader of Wandsworth council means that he will be aware that it did not intervene to require any planning gain from developers and did not wish to increase any of its local taxes, because it believed in providing minimal services to the residents in the borough. It is for authorities to decide, and we believe in empowering them to do so.
	I wish to deal with three specific points that the hon. Gentleman raised, one of which concerns windfall development. He said that such development cannot be counted towards future housing supply, but that is just not true. My right hon. Friend the Minister for Housing would have confirmed that. Housing coming from that source will be counted, and in some areas windfall development will make a significant contribution to supply. A further point raised by the hon. Gentleman was that more houses mean that more people come into his region. We cannot put up walls, even around Mole Valley; of course some people will move in to take up jobs or to be nearer to work, and others will move out. More people move from the south-east to the north-east than vice versa. However, we do know, as the hon. Gentleman accepted, that many of the new households will be needed by the indigenous population, the sons and daughters of the constituents who now express concern about the south east plan.
	The hon. Gentleman also suggested taking the pressure off the south-east by putting more housing elsewhere. Outside the Chamber, I suspect that the hon. Gentleman would accept that we cannot shift growth from the south to the north by changing where we build new houses, because that just ignores the economic reality. I know that he is a great believer in the market.

Paul Beresford: I was actually referring to the movement of jobs and the role of the regional development agencies. From my own experience in a similar ministerial role, I know that when the jobs moved north, the people went with them. In the north, where the bulldozers were going to knock the houses down, there were houses available. The issue is not about building houses, but attracting people.

Sadiq Khan: The hon. Gentleman is in danger of being the first Member of Parliament ever to encourage businesses to move away from his constituency, with all the implications that that would have. I take his point and he will appreciate that we can encourage businesses to go to certain areas of the country, but we are not in favour of being prescriptive about that.
	Some 13,000 responses to the consultation are now being logged and they will be carefully considered, with any necessary changes being made to the plan before it is finally published next year. The Government recognise that there are no easy solutions and at the same time accept that there is no real alternative. Everyone thinks that their area is special, but no area can shirk the challenges it faces. While the current global economic conditions are a great concern, they will not last, but the legacy of the 20-year south east plan must be a lasting and positive one. Therefore, all of usthe Government, the regional assembly, the local authorities, local MPs and othersmust take responsibility for delivering the development needed to create and maintain sustainable communities in the south-east, and we must all take responsibility also for ensuring that the south east plan plays its part in that task.
	Once again, I congratulate the hon. Gentleman on raising this issue. He has passionately articulated the concerns of his constituents, and I hope that he will accept that we have listened.
	 Question put and agreed to.
	 Adjourned accordingly at twenty-seven minutes past Six o'clock.